Pesec v. Roto-Die, Inc. ( 2011 )

[Cite as Pesec v. Roto-Die, Inc., 2011-Ohio-6288.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 96775
JOSEPH PESEC
PLAINTIFF-APPELLANT
vs.
ROTO-DIE, ET AL.
DEFENDANTS-APPELLEES
JUDGMENT:
AFFIRMED AS MODIFIED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-748058
BEFORE: Kilbane, A.J., Sweeney, J., and Cooney, J.
RELEASED AND JOURNALIZED: December 8, 2011
ATTORNEYS FOR APPELLANT
Matthew Gilmartin
P.O. Box 939
North Olmsted, Ohio 44070
Carol Jackson
3900 Cullen Drive
Cleveland, Ohio 44105
ATTORNEYS FOR APPELLEES
Mark E. Avsec
Matthew D. Gurbach
Lori H. Welker
Benesch, Friedlander, Coplan, Aronoff, LLP
200 Public Square
Suite 2300
Cleveland, Ohio 44114-2378
MARY EILEEN KILBANE, A.J.:
{¶ 1} Plaintiff-appellant, Joseph Pesec, appeals from the order of the trial court that
dismissed his declaratory judgment action against Roto-Die, Inc. (“Roto-Die”) and Gem
Equity Corporation (“Gem Equity”) for failure to state a claim. For the reasons set forth
below, we modify the judgment of the trial court and, as modified, we affirm.
{¶ 2} The record indicates that Pesec worked as a salesman for Austin-Hunt
Corporation (“Austin-Hunt”) and Roto-Die, metal fabricating companies that shared
management and sales functions. In May 2006, Roto-Die sold its assets, including customer
lists and proprietary business information, to Gem Equity. In July 2006, Austin-Hunt sold its
assets, including customer lists and proprietary business information, to AHAcquisition, L.L.C.
Roto-Die and Austin-Hunt subsequently filed suit against Pesec in Lake County seeking to
enjoin him from, inter alia, using customer lists, suppliers, drawings, and other assets.
{¶ 3} On October 18, 2006, Austin-Hunt, Roto-Die, and Pesec filed an Agreed
Judgment Entry in the Lake County Court of Common Pleas. Under the terms of this
judgment entry, Pesec and all persons acting in concert with him, were “permanently
restrained and enjoined from any, every and all use of the property, assets, name, trade name,
goodwill, customers, customer lists, customer data, suppliers, supplier information and data,
proprietary information, drawings, and any and every other asset of Plaintiff Austin-Hunt
Corporation and Roto-Die, Inc[.]”
{¶ 4} The judgment also indicated that it was enforceable in Cuyahoga County.
{¶ 5} On February 7, 2011, Pesec filed a complaint for declaratory judgment against
Roto-Die and Gem Equity in Cuyahoga County. Pesec alleged that he was incarcerated and
unrepresented by counsel when he signed the 2006 Agreed Judgment Entry. He additionally
complained that the noncompete provisions of the Agreed Judgment Entry contained no
limitations as to time or geographical area, and he sought a declaration from the court
regarding the validity of these provisions.
{¶ 6} On March 18, 2011, defendants Roto-Die and Gem Equity filed a motion to
dismiss. Defendants argued that Pesec’s complaint failed to state a claim because the
declaratory judgment statutes do not authorize courts to declare the rights that arise from
judgments and that the declaratory judgment complaint constituted an improper collateral
attack on the agreed judgment entry. Defendants additionally argued that while Pesec could
have obtained relief from judgment pursuant to Civ.R. 60(B), his time to do so had expired.
{¶ 7} In opposition, Pesec argued that the matter concerned the construction or
validity of a noncompete contract and was, therefore, a proper subject for a declaratory
judgment. Pesec additionally argued that if relief is also denied under Civ.R. 60(B), then he
is without a remedy.
{¶ 8} On April 11, 2011, the trial court granted defendants’ motion to dismiss and
concluded:
{¶ 9} “* * *Plaintiff relies upon Ohio Revised Code Sec. 2721.03. Plaintiff’s only
possible remedies were to file a motion under Rule 60(B), although his time to do so expired
more than three years ago, or to pursue appellate relief.”
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{¶ 10} Pesec now appeals and assigns two errors for our review.
{¶ 11} Pesec’s first assignment of error states:
“The trial court erred by not granting Appellant declaratory relief.”
{¶ 12} The dismissal of a complaint for failure to state a claim upon which relief can
be granted pursuant to Civ.R. 12(B)(6) is subject to de novo review. Shockey v. Wilkinson
(1994), 96 Ohio App. 3d 91, 644 N.E.2d 686.
{¶ 13} In order for a court to dismiss a complaint for failure to state a claim upon
which relief may be granted, it must appear beyond doubt that the plaintiff can prove no set of
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On May 6, 2011, Pesec moved for relief from judgment. This document is not
part of the file herein, and on May 10, 2011, Pesec filed his notice of appeal from the
April 11, 2011 ruling.
facts in support of his claim that would entitle him to relief. O’Brien v. Univ. Community
Tenants Union, Inc. (1975), 42 Ohio St. 2d 242, 327 N.E.2d 753. All factual allegations of
the complaint are presumed to be true, and all reasonable inferences are made in favor of the
nonmoving party. Mitchell v. Lawson Milk Co. (1988), 40 Ohio St. 3d 190, 532 N.E.2d 753.
{¶ 14} A trial court may properly dismiss a complaint for declaratory judgment based
upon a determination that there was no real controversy or justiciable issue between the parties
or because a declaratory judgment would not terminate the uncertainty or controversy.
Weyandt v. Davis (1996), 112 Ohio App. 3d 717, 679 N.E.2d 1191.
{¶ 15} As to the existence of a justiciable issue we note that “courts of record may
declare rights, status, and other legal relations whether or not further relief is or could be
claimed.” R.C. 2721.02(A).
{¶ 16} Pursuant to R.C. 2721.03,
“[A]ny person interested under a deed, will, written contract, or other writing
constituting a contract or any person whose rights, status, or other legal
relations are affected by a constitutional provision, statute, rule as defined in
section 119.01 of the Revised Code, municipal ordinance, township
resolution, contract, or franchise may have determined any question of
construction or validity arising under the instrument, constitutional provision,
statute, rule, ordinance, resolution, contract, or franchise and obtain a
declaration of rights, status, or other legal relations under it.”
{¶ 17} See, also, R.C. 2721.04 (parties may have contractual rights construed in a
declaratory judgment action).
{¶ 18} In general, however, declaratory judgment actions may not be used to
collaterally attack a final judgment. See Ohio Pyro, Inc. v. Ohio Dept. of Commerce, 115
Ohio St. 3d 375, 2007-Ohio-5024, 875 N.E.2d 550. Adhering to the “firm and longstanding
principle that final judgments are meant to be just that — final[,]” the court in Ohio Pyro
noted that civil judgments may be challenged in direct appeals and Civ.R. 60(B) proceedings.
Collateral proceedings such as declaratory judgment actions may be maintained only where in
“two principal circumstances — when the issuing court lacked jurisdiction or when the order
was the product of fraud.” Id.
{¶ 19} Res judicata principles can also apply to prevent parties and those in privity
with them from modifying or collaterally attacking a previous judgment. Ohio Pyro, citing
Grava v. Parkman Twp., 73 Ohio St. 3d 379, 381-382, 1995-Ohio-331, 653 N.E.2d 226 (“A
valid, final judgment rendered upon the merits bars all subsequent actions based upon any
claim arising out of the transaction or occurrence that was the subject matter of the previous
action.”).
{¶ 20} Moreover, a judgment entered by consent is “as effective as if the merits had
been litigated” and is “just as enforceable as any other validly entered judgment.” Id., citing
Gilbraith v. Hixson (1987), 32 Ohio St. 3d 127, 512 N.E.2d 956.
{¶ 21} Applying the foregoing, Pesec’s complaint challenging the consent judgment
constituted an impermissible collateral attack on that judgment. As such, there was no
justiciable issue, and Pesec did not state a claim for relief. The first assignment of error is
without merit.
{¶ 22} The second assignment of error states:
“The trial court erred in ruling time for O.Civ.R.P.60(B) time limit expired
which was beyond the Court’s jurisdiction.”
{¶ 23} Pesec next complains that the trial court erred in holding that the time within
which to file a motion for relief from the Lake County Agreed Judgment Entry pursuant to
Civ.R. 60(B) had expired, as this ruling purported to usurp the jurisdiction of the Lake
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County Court of Common Pleas.
{¶ 24} Because Pesec had not moved for relief under Civ.R. 60(B) and this issue was
not properly before the trial court, the court’s determination that the period for obtaining relief
under this rule had expired was an advisory opinion. See Egan v. Natl. Distillers & Chem.
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In relevant part, this rule states:
“On motion and upon such terms as are just, the court may relieve a party or
his legal representative from a final judgment, order or proceeding for the following
reasons: (1) mistake, inadvertence, surprise or excusable neglect; (2) newly
discovered evidence which by due diligence could not have been discovered in time
to move for a new trial under Rule 59(B); (3) fraud (whether heretofore denominated
intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party;
(4) the judgment has been satisfied, released or discharged, or a prior judgment
upon which it is based has been reversed or otherwise vacated, or it is no longer
equitable that the judgment should have prospective application; or (5) any other
reason justifying relief from the judgment. The motion shall be made within a
reasonable time, and for reasons (1), (2) and (3) not more than one year after the
judgment, order or proceeding was entered or taken. * * *”
Corp. (1986), 25 Ohio St. 3d 176, 495 N.E.2d 904, syllabus. Moreover, since Pesec had not
moved for relief from judgment, it was not certain that he was invoking the provisions of
Civ.R. 60(B)(1), (2), or (3), which have a one-year time limit, or the provisions of Civ.R.
60(B)(4) or (5), which are to be filed only within a “reasonable time.” As such, the court’s
April 11, 2011 pronouncement on the issue of the timeliness of a motion for relief from
judgment is purely advisory and nonbinding, and we modify the court’s judgment to strike that
portion of the entry.
{¶ 25} The second assignment of error is well taken.
{¶ 26} The judgment of the trial court is modified to strike the court’s determination
that the “only possible remedies were to file a motion under Rule 60(B), although his time to
do so expired more than three years ago,” and having so modified the trial court’s judgment,
we affirm.
It is ordered that appellees recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into
execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the
Rules of Appellate Procedure.
MARY EILEEN KILBANE, ADMINISTRATIVE JUDGE
JAMES J. SWEENEY, J., CONCURS;
COLLEEN CONWAY COONEY, J., CONCURS IN JUDGMENT ONLY (SEE SEPARATE
OPINION)
COLLEEN CONWAY COONEY, J., CONCURRING IN JUDGMENT ONLY:
{¶ 27} I concur in the judgment to affirm the trial court’s dismissal.
However, I see no need to strike the “advisory opinion” portion of the court’s
entry. It was merely advisory to appellant and could not control the Lake
County court’s possible review of a Civ.R. 60(B) motion.