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Romansik v. Boccia

Court of Appeals of Ohio, Eleventh District, Trumbull County
Jun 21, 2002
Case No. 2001-T-0116 (Ohio Ct. App. Jun. 21, 2002)

Opinion

Case No. 2001-T-0116.

June 21, 2002.

Civil Appeal from the Court of Common Pleas, Case No. 99 CV 1785 Judgment: Reversed and remanded.

Phillip A. Lawrence, 26 South Franklin Street, P.O. Box 226, Chagrin Falls, OH 44020, and James T. Flaherty, 7187 Hodgson Road, Mentor, OH 44060 (For Plaintiff-Appellant).

Charles E. Dunlap, 3855 Starr's Centre Drive, Ste. A, Canfield, OH 44406 (For Defendants-Appellees).


OPINION


Appellant, Nicholas Romansik, appeals from the October 4, 2001 judgment entry of the Trumbull County Court of Common Pleas dismissing his complaint for failure to state a claim upon which relief may be granted.

On March 10, 1980, appellant, in conjunction with appellees, Louis T. Boccia and Richard A. Boccia, and Nestor Stychno, who is not a party to this action, founded Howland-Green Development, Incorporated ("Howland"). Howland owns three parcels of real estate in Howland Township. Appellant holds 44% of Howland's stock, while appellees possess 56%.

The state revoked Howland's charter on December 30, 1996, for non-payment of franchise taxes. On September 29, 1999, appellant filed a complaint for partition of the properties held by Howland. This complaint was assigned case number 99-CV-1785. The state reinstated Howland's charter on December 12, 1999, after the corporation paid its back taxes. On August 14, 2000, appellant filed an amended complaint for partition. Appellant then filed a motion for a declaratory judgment on August 22, 2000.

Appellees filed a motion to strike. On September 14, 2000, appellant filed a brief in response to appellees' motion to strike and requested that the trial court convert the August 22 motion into a separate complaint for declaratory judgment. Although we are unable to find such a judgment entry in the transcript provided, appellant's request was apparently granted, and a separate case number, 2000 CV 1650, was assigned to the complaint for declaratory judgment. Appellees filed a motion for summary judgment on September 21, 2000, in case number 99 CV 1785. On August 17, 2001, the two cases were consolidated by agreement of the parties. The relevant judgment entry stated that "the parties hereto agree that the court may use all the pleadings, motions, affidavits, and briefs filed in both cases to render a judgment on the pending motion for summary judgment and dispose of both cases as one matter."

In its October 4, 2001 judgment entry, the trial court held that, with respect to the declaratory judgment action, Howland was a corporation of good standing from December 30, 1996, onward entitling it to own the properties in question; consequently, appellant had failed to state a cause of action for partition, and his complaint was dismissed. No mention was made in the judgment entry about appellees' motion for summary judgment.

Appellant has filed a timely appeal and makes the following four assignments of error:

"1. Howland is a close corporation pursuant to [ Smitko v. Schiano (1988), 11th Dist. No. 1370, 1988 WL 64771], and [ Estate of Schroer v. Stamco (1984), 19 Ohio App.3d 34], and is subject to [R.C.] 1701.91, as to a judicial dissolution, and it is error of law to dismiss the complaint for dissolution solely because the corporation was either de facto or de jure.

"2. Where a complaint for the judicial dissolution pursuant to [R.C.] 1701.91(A)(2)(A) has been properly filed in the common Pleas court, it is error of law and specifically contrary to [R.C.] 1701.88(B) and 1709.91 for the trial court to rule that the reinstatement of the corporation pursuant to [R.C.] 1701.922 (reinstatement) is retroactive so as to void, nullify, and negate the rights accrued under [R.C. 1701.91] (dissolution).

"3. Where a complaint for the judicial dissolution pursuant to [R.C.] 1701.91(A)(2)(a) has been properly filed in the common Pleas court, it is error of law for the trial court to rule that the complaint must be dismissed because the de facto corporation had become de jure, when that status is irrelevant as to shareholder rights under [R.C.] 1701.91; the relevant legal issue was whether it was a close corporation pursuant to [ Smitko] and [ Estate of Schroer], and subject to the [R.C.] 1701.91 dissolution provisions.

"4. When a de facto corporation has been reinstated as a de jure corporation, it is error of law, and specifically contrary to [R.C.] 1701.88(B) and 1709.91, for the trial court to rule that any actions or proceedings brought against the corporation while it was de facto, are thereby voided, annulled, and abolished upon reinstatement; and further, irrelevant to the main issue."

Appellant's assignments of error will be treated in a consolidated fashion. The first matter that has to be addressed in this case is the nature of appellant's complaint. Appellant has characterized it as a complaint for dissolution. We disagree with this characterization.

Appellant's September 29, 1999 complaint was captioned "Complaint for Partition." The complaint described the disputed properties as being held by appellant and appellees as "tenants in common." The complaint also stated that appellant and appellees had "acquired their interest in the property by dissolution of [Howland]." In short, appellant's original complaint was for the partition of the properties and was premised on the assumption that Howland had already been dissolved.

R.C. 1701.91(B) states that "[a] complaint for judicial dissolution * * * shall set forth facts showing that the case is one of those specified in this section." Pursuant to R.C. 1701.91(A)(2), a common pleas court may judicially dissolve a corporation, in an action brought by holders of shares entitled to dissolve the corporation voluntarily, when one of the following is established: (1) the corporation's articles have been cancelled; (2) the corporation is insolvent; or (3) the objects of the corporation have wholly failed. Although Howland's charter had been revoked by the state for failure to pay franchise tax, appellant's September 29, 1999 complaint failed to aver any of the foregoing three circumstances.

Subsequent to Howland's charter being reinstated, appellant filed his amended complaint of August 14, 2000, which was captioned "Amended Complaint for Partition." In his amended complaint, appellant noted that Howland's charter had been cancelled on December 30, 1996. However, at that point, appellant had no grounds for bringing a complaint for dissolution, because Howland's charter had already been reinstated. Therefore, we conclude that, in spite of his protestations to the contrary, appellant never filed a complaint for dissolution. Rather, he filed a complaint for partition.

R.C. 5307.01 sets forth that the following persons may be compelled to make or suffer partition: "[t]enants in common, survivorship tenants, and coparceners, of any estate in lands, tenements, or hereditaments within the state * * *." Appellant posited in his complaint that he and appellees were tenants in common with respect to the properties at issue; however, that was clearly not the case.

Pursuant to R.C. 1701.88(A), when a corporation's charter is revoked, it does not cease to exist; rather, it "remains a de jure corporation for the limited purpose of winding up its affairs or obtaining reinstatement of its articles of incorporation." Thomas v. Price (1999), 133 Ohio App.3d 585, 589; Eleanore Builders, Inc. v. United States of Am. (N.D.Ohio. 1993), 826 F. Supp. 1111, 1115 ("[i]n Ohio a corporation whose charter is terminated for failure to pay franchise taxes continues to be a corporation"). Here, regardless of whether appellees had ever sought reinstatement of the corporate charter, Howland continued to exist after its charter had been revoked and continued to hold title to the disputed properties. At no point were appellant and appellees tenants in common; the properties were always in the sole possession of Howland. Because Howland, as the sole owner of the properties, could not be compelled to partition, we find no merit in appellant's four assignments of error.

Nevertheless, the trial court erred in dismissing the complaint pursuant to Civ.R. 12(B)(6). As noted previously, in its August 17, 2001 judgment entry, the court stated that it would use all the pleadings, motions, affidavits, and briefs filed in both cases to render a judgment on the pending motion for summary judgment * * *." However, instead of granting appellees' motion for summary judgment, the trial court chose to dismiss the case for failure to state a claim. "In resolving a Civ.R. 12(B)(6) motion, a court is confined to the averments set forth in the complaint." Steiner v. Steiner (1993), 85 Ohio App.3d 513, 518. In the instant case, the trial court stated in its findings of fact and conclusions of law that it rendered judgment "based upon the pleadings, stipulations, admission [sic], and briefs." Clearly, the trial court went beyond the averments of the complaint in ruling upon appellees' Civ.R. 12(B)(6) motion.

When a Civ.R. 12(B)(6) motion to dismiss goes beyond the pleadings, the general rule is that it must be treated as a motion for summary judgment, unless the matters outside the pleadings are excluded by the court. Wickliffe Country Place v. Kovacs, 11th Dist. No. 2000-L-157, 2001 WL 1182853, at 2, 2001-Ohio-4302. Here, the trial court failed to make the necessary conversion, in spite of the fact that appellees had filed a motion for summary judgment.

For the foregoing reasons, the judgment entry of the Trumbull County Court of Common Pleas is reversed, and this matter is remanded for further proceedings consistent with this opinion.

WILLIAM M. O'NEILL, P.J., DIANE V. GRENDELL, J., concur.


This writer dissents from the majority, which concluded that the judgment granting summary judgment in favor of appellee should be reversed and remanded. It is evident that appellants submitted no affidavits or other evidential material relating to the issue of immunity in response to appellee's motion for summary judgment.

Further, appellants argued that the unreasonable use of water is always negligence; thus, precluding the need to plead or prove negligence. Appellants' argument on appeal pertains only to the applicability of the doctrine of sovereign immunity that was asserted by appellee in its summary judgment motion. It is noted that appellants did not set forth any other claims that were argued by appellee in its summary judgment motion. In Nelson v. Conneaut Twp. Park Dist. Bd. of Park Commrs., 11th Dist. App. No. 2001-A-0016, 2002 WL 5356, 2001-Ohio-7060, ¶ 22, this court noted that the Supreme Court of Ohio had stated that, in order for local governments to continue to function effectively, some forms of municipal sovereign immunity must necessarily exist. Unless statutory immunity is provided, sovereign immunity is not available to a municipality in an action for damages alleged to be caused by the tortious conduct of the municipality. Strohofer v. Cincinnati (1983), 6 Ohio St.3d 118, syllabus.

It is also this writer's position that negligence is not an element of the tort of unreasonable use of ground water pursuant to R.C. 1521.17(B). Neither the Supreme Court of Ohio decision that created the tort of unreasonable use of ground water, nor its progeny refer to negligence as an element of that tort. See Cline v. Am. Aggregates Corp. (1984), 15 Ohio St.3d 384, syllabus.

Therefore, it is my view that appellee was entitled to summary judgment since appellants have not proven that appellee engaged in any negligent conduct to establish an exception to immunity under R.C. 2744.02(B)(2). Appellants merely chose to rely on allegations of unreasonable use in their complaint. Appellants' complaint did not allege that appellee's employees performed negligently in the pumping of groundwater. Furthermore, appellee's actions were discretionary decisions made by high-ranking officials engaged in policy making, which are immune under R.C. 2744.03(A)(3). Lastly, appellee's actions were immune under R.C. 2744.03(A)(5) as exercises of judgment in determining whether to acquire and how to use equipment, supplies, materials, personnel, facilities, and other resources, and appellants have not demonstrated malicious purpose, bad faith, or willful and wanton conduct in appellee's exercise of those functions.

This writer also adds that in the Village of Brady Lake v. Kent (Nov. 3, 1995), 11th Dist. No. 94-P-0047, 1995 WL 803615, the plaintiffs' water wells at their individual residences went dry as the result of the defendant's pumping of ground water at its municipal well field. At the time the plaintiffs first discovered the problem, a cause of action for this type of injury could not be maintained under Ohio law. However, after the problem had been remedied, the Supreme Court recognized such a cause of action in Cline, supra. Eight years after Cline, the plaintiffs in the village of Brady Lake filed an action seeking damages for the loss of the well water, but the trial court dismissed the action because it was barred by the statute of limitations. This court agreed with the trial court and stated that:

"* * * even though Cline set forth a new common law ruling which is to be applied retrospectively, it did not commence a new period of limitation with respect to injuries which occurred and were completed prior to the announcement of the decision. * * * Therefore, even though [the plaintiffs] were not aware that they had a cause of action until the Cline decision in 1984, their cause of action arose in 1982 when they drilled new wells and their injuries ceased." Id. at 2, citing Carter v. Am. Aggregates Corp. (1992), 82 Ohio App.3d 181.

Thus, pursuant to the 1995 Brady Lake decision, a cause of action accrues when the injury occurs, even if the cause of action has not been recognized under Ohio law at that time. Moreover, if the running of the applicable statute of limitations ends before the cause of action is recognized, the cause of action of the injured party is extinguished and cannot be resurrected even after the cause of action is recognized.

The appellants in Brady Lake also argued that their claims were not time-barred because the acts of appellee, the city of Kent, constituted a continuing tort. We stated that:

"* * * Even if the doctrine of continuing tort applies, a cause of action accrues when a person suffers injury. Unless [the plaintiffs] established that they suffered injury within the limitations period, their claims are barred. * * *

"The continuing injury to which [the plaintiffs] refer is damage to the quality of their water. Although the water quality issue was raised and supported on summary judgment, [the plaintiffs] did not allege these damages in their complaint. In their complaint, [the plaintiffs] allege damages relating only to water quantity, not quality. [The plaintiffs'] complaint alleges that [the defendant's] withdrawal of groundwater `unreasonably restrained and interfered with the daily household and personal use of said water,' necessitated the drilling and installation of deeper wells, and caused the fair market value of their residences to depreciate. While the damages have been alleged in general terms, nothing has been alleged which is broad enough to encompass damages based on the quality of the water.

"Therefore, [the plaintiffs'] damage claim is based on the quantity, not the quality, of their water supply. It is undisputed that [the plaintiffs] no longer suffer from dry wells. Therefore the continuing tort doctrine will not save their claims." Id. at 3.

In the instant matter, it is this writer's view that appellants' contentions do not fit under any exception to immunity which is set forth in R.C. 2744.02(B)(2). It is also my position that immunity was granted to appellee as to its operation of a municipal corporation water supply company, and, pursuant to R.C. 2744.02(A)(1), "* * * a political subdivision is not liable in damages in a civil action for injury, death, or loss to person or property allegedly caused by any act or omission of the political subdivision or an employee of the political subdivision in connection with a governmental or proprietary function." Thus, it is my opinion that appellants failed to satisfy their burden under Civ.R. 56(E) by setting forth specific facts to show that there was a genuine issue of material fact that remained to be litigated as did the appellants in the Brady Lake decision issued by this court in 1995. It would appear that appellants' ultimate solution to their plight lies with the legislature. For these reasons, I, therefore, dissent from the majority.


Summaries of

Romansik v. Boccia

Court of Appeals of Ohio, Eleventh District, Trumbull County
Jun 21, 2002
Case No. 2001-T-0116 (Ohio Ct. App. Jun. 21, 2002)
Case details for

Romansik v. Boccia

Case Details

Full title:NICHOLAS ROMANSIK, Plaintiff-Appellant, v. LOUIS T. BOCCIA, et al.…

Court:Court of Appeals of Ohio, Eleventh District, Trumbull County

Date published: Jun 21, 2002

Citations

Case No. 2001-T-0116 (Ohio Ct. App. Jun. 21, 2002)