Torbeck v. Indus. Mfg. Co. ( 2015 )

[Cite as Torbeck v. Indus. Mfg. Co., 2015-Ohio-3041.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
RICHARD TORBECK, : APPEAL NO. C-140533
TRIAL NO. A-0909776
Plaintiff-Appellant, :
and : O P I N I O N.
TORBECK INDUSTRIES, INC., :
Plaintiff, :
vs.
:
INDUSTRIAL MANUFACTURING
COMPANY, :
PENCO PRODUCTS, INC., :
and :
MERLYN JARMAN, :
Defendants-Appellees. :
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Appeal Dismissed
Date of Judgment Entry on Appeal: July 31, 2015
Freking & Betz, LLC, Randolph H. Freking and Brian P. Gillan, and Matt Miller-
Novak, Godbey & Associates, for Plaintiff-Appellant,
Vorys, Sater, Seymour, and Pease L.L.P., Daniel Buckley, Mary C. Henkel, J.B.
Lind, David F. Hine and Katherine G. Barnes, for Defendants-Appellees.
Please note: this case has been removed from the accelerated calendar.
OHIO FIRST DISTRICT COURT OF APPEALS
M OCK , Judge.
{¶1} Plaintiff-appellant Richard Torbeck appeals the trial court’s entry
granting judgment to defendants-appellees Industrial Manufacturing Company, Penco
Products, Inc., and Merlyn Jarman on plaintiff Torbeck Industries, Inc.’s, claims for
breach of the duty of loyalty and misappropriation of trade secrets. Because Torbeck
lacks standing to pursue these claims, which were brought solely by Torbeck Industries,
we dismiss the appeal.
Factual and Procedural Posture
{¶2} Torbeck Industries and its principal shareholder and president, Richard
Torbeck, sued Industrial Manufacturing Company, Penco Products, Inc., and Jarman
(“the defendants”). In the third amended complaint, Torbeck Industries alleged claims
for breach of contract, tortious interference with business relationships,
misappropriation of trade secrets, fraud, breach of the duty of loyalty, and civil
conspiracy. Both Torbeck and Torbeck Industries alleged claims for fraud and civil
conspiracy.
{¶3} The defendants filed a motion to bifurcate the case as to liability and
damages, which the trial court granted. Following a bench trial on liability, the trial
court issued a decision in favor of Torbeck Industries on its claims for breach of contract,
tortious interference with a contract, misappropriation of trade secrets, and breach of
the duty of loyalty. The trial court took the civil conspiracy and fraud counts under
submission. It dismissed the remaining claims.
{¶4} A damages trial subsequently took place. At the close of the plaintiffs’
case, the defendants moved for a directed verdict, which the trial court granted. The
trial court subsequently issued a decision dismissing the claims which it had taken under
2
OHIO FIRST DISTRICT COURT OF APPEALS
submission. As a result, the trial court entered a final judgment for the defendants on all
of the plaintiffs’ claims.
{¶5} Torbeck filed a timely notice of appeal. The caption of the notice of
appeal listed “Torbeck Industries et al.” as plaintiffs and “Industrial Manufacturing Co.
et al” as defendants. The body of the notice of appeal, however, stated that “Notice is
hereby given that Plaintiff Richard Torbeck appeals to the Court of Appeals from the
order granting the defendants’ motion for a directed verdict * * * .” The notice of appeal,
likewise, listed counsel as attorneys for the appellant (singular).
{¶6} In three assignments of error, Torbeck argues the trial court erred in
granting the defendants’ motion for a directed verdict on Count X for breach of the
duty of loyalty and Count VII for misappropriation of trade secrets, and for failing to
award punitive damages as to the misappropriation-of-trade secrets claim.
{¶7} The defendants argue that Torbeck cannot appeal from the judgment
on those counts, because the claims were brought by Torbeck Industries, which is not
a party to this appeal because it was not listed as an appellant in the notice of appeal.
Thus, the defendants argue that we are precluded from considering any arguments
on behalf of Torbeck Industries.
{¶8} App.R. 3(D) provides that the notice of appeal “shall specify the party
or parties taking the appeal.” In Torres v. Oakland Scavenger Co., 487 U.S. 312,
317-318, 108 S.Ct. 2405, 101 L.Ed.2d 285 (1988), the United States Supreme Court
held that a notice of appeal that contained the designation “et al.” failed to provide
the notice required under Fed.R.App.P. 3 and acted as a jurisdictional bar to those
parties who were not expressly named in the notice of appeal.
{¶9} In Transamerica Inc. v. Nolan, 72 Ohio St.3d 320, 649 N.E.2d 1229(1995), the Ohio Supreme Court addressed the dismissal of an appeal for lack of
3
OHIO FIRST DISTRICT COURT OF APPEALS
jurisdiction where the notice of appeal had designated the appellants as “Dennis
Wallace et al.” The Twelfth District Court of Appeals, relying upon Torres, had held
that it lacked jurisdiction to hear Linda Wallace’s appeal because the notice of appeal
failed to specific the party or parties taking the appeal in compliance with App.R.
3(D). Id. at 321.
{¶10} The Ohio Supreme Court acknowledged the similarity between App.R.
3(D) and Fed.R.App.P. 3, but declined to interpret the Ohio rule as strictly as the
Torres court had interpreted the federal rule. In doing so, the Supreme Court
focused on the language in App.R. 3(A), which provides the “[f]ailure of an appellant
to take any step other than the timely filing of a notice of appeal does not affect the
validity of the appeal, but is ground only for such action as the court of appeals
deems appropriate, which may include dismissal of the appeal.” Id. at 322.
{¶11} The Ohio Supreme Court held that
[p]ursuant to App.R. 3(A), the only jurisdictional requirement for a
valid appeal is the timely filing of a notice of appeal. [Thus], when
presented with other defects in the notice of appeal, a court of appeals
is vested with discretion to determine whether sanctions, including
dismissal are warranted, and its discretion will not be overturned
absent an abuse of discretion.
Id. at syllabus.
{¶12} Thus, the Ohio Supreme Court held that the notice of appeal, which
had designated the appellants as “Dennis Wallace et al,” was not a jurisdictional
defect and did not bar the appellate court from hearing the appeal of Dennis
Wallace’s wife, Linda Wallace. Id. at 322. The court held that the use of the term “et
al.” might not always be appropriate, but that the appellees were not prejudiced by
4
OHIO FIRST DISTRICT COURT OF APPEALS
use of the designation because “all parties were aware of the interests of Linda
Wallace and proceeded under the assumption that she was a party.” Id. Therefore,
the Ohio Supreme Court held that the court of appeals had abused its discretion by
dismissing her appeal. Id. at 322-323.
{¶13} In Grand Council of Ohio v. Owens, 86 Ohio App.3d 215, 218, 620
N.E.2d 234 (10th Dist.1993), which predated the Supreme Court’s opinion in
Transamerica, the Tenth Appellate District “addressed a motion filed by defendants
seeking an order ‘dismissing for lack of jurisdiction all purported plaintiffs-
appellants which [we]re not specified in the notice of appeal.’ ” The original notice
of appeal filed by the plaintiffs had stated: “[n]otice is hereby given that The Grand
Council of Ohio, the Order of United Commercial Travelers of America (“UCT”), et al.
(the plaintiffs herein), hereby appeal * * *.” The defendants argued that the phrase
“et al.” contained in both the caption and in the body of the notice of appeal was
inadequate to meet the requirements of App.R. 3(D), which provides that “[t]he
notice of appeal shall specify the party or parties taking the appeal.” Thus, the
defendants maintained that the plaintiffs’ failure to specify each of the individual
appellants in the notice of appeal precluded the court of appeals from exercising
jurisdiction over the appeal of any plaintiffs except UCT.
{¶14} The Tenth District disagreed. It acknowledged that while the better
practice may be to name all the parties appealing, App.R. 3(A) did not make such a
requirement jurisdictional. Id. at 219. The Tenth District further noted that the
plaintiffs had subsequently filed a motion to amend the notice of appeal to name
every party, which the court had granted. As a result, it denied the defendants’
motion to dismiss the appeal. Id.
5
OHIO FIRST DISTRICT COURT OF APPEALS
{¶15} In this case, Torbeck argues that we should employ the reasoning in
Transamerica and Grand Council to permit the appeal by Torbeck Industries. But
we find both cases to be factually distinguishable. Here, there is no defect on the face
of the notice of the appeal. The caption of the notice of appeal states: “Torbeck
Industries, et al” plaintiffs. The body of the notice of appeal, however, designates
only Richard Torbeck as the appellant and does not use the term “et al.,” as did the
notices of appeal in Transamerica and Grand Council. The notice of appeal also lists
counsel as attorneys for the appellant (singular). Because Torbeck Industries is not
designated as an appellant in the notice of appeal, it is not a party to this appeal. See
State v. Langston, 6th Dist. Lucas No. L-12-1014, 2012-Ohio-6249, ¶ 12.
{¶16} In the third amended complaint, Torbeck did not allege an interest in
Counts VII (misappropriation of trade secrets) and X (breach of the duty of loyalty),
and the complaint specified only that Torbeck Industries alleged damages as to those
claims. Yet, Torbeck challenges on appeal the trial court’s ruling on the defendants’
motion for a directed verdict on Torbeck Industries’ claims for breach of the duty of
loyalty and misappropriation of trade secrets, claims that were raised only by
Torbeck Industries. Torbeck, however, has no standing to assert error as to these
claims.
{¶17} Generally, a litigant must assert his own rights and not the rights of
third parties. City of N. Canton v. City of Canton, 114 Ohio St.3d 253, 2007-Ohio-
4005, 871 N.E.2d 586, ¶ 14. Ohio law provides that a duty of loyalty is owed to the
corporate employer, not its officers. See Veterinary Dermatology, Inc. v. Bruner, 1st
Dist. Hamilton No. C-040648, 2005-Ohio-5552, ¶ 16 (“In order to demonstrate that
an employee breached her duty of loyalty, the employer must demonstrate that the
employee engaged in competition with the employer.”). Likewise, Ohio law provides
6
OHIO FIRST DISTRICT COURT OF APPEALS
that the company, not its corporate officer, owns the company’s trade secrets.
Therefore, Torbeck has no standing to assert error as to those claims on Torbeck
Industries’ behalf. Century Business Servs. v. Barton, 197 Ohio App.3d 352, 2011-
Ohio-5917, 967 N.E.2d 782, ¶ 28 (8th Dist.) (noting that trade secrets belonged to
corporation, not its president and CEO).
{¶18} Because Torbeck did not raise these claims in the trial court and was
not aggrieved by the judgment relating to misappropriation of trade secrets and the
duty of loyalty, he lacks standing to challenge the trial court’s judgment as it relates
to those claims. See Langston, 6th Dist. Lucas No. L-12-1014, 2012-Ohio-6249, at ¶
8 (“[a]n appeal lies only on behalf of an aggrieved party who must demonstrate that
he has a present interest in the litigation and is prejudiced by the judgment appealed
from.”); Trust U/W of A.J. Woltering, 1st Dist. Hamilton No. C-970913, 1999 Ohio
App. LEXIS 420, *4-5 (Feb. 12, 1999). As a result, we dismiss Torbeck’s appeal.
Appeal dismissed.
HENDON, P.J., and STAUTBERG, J., concur.
Please note:
The court has recorded its own entry this date.
7