Promac Technologies, L.L.C. v. Fabrication Automation, L.L.C. , 2021 Ohio 4272 ( 2021 )

[Cite as Promac Technologies, L.L.C. v. Fabrication Automation, L.L.C., 2021-Ohio-4272.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
PROMAC TECHNOLOGIES, LLC, : APPEAL NO. C-200437
TRIAL NO. A-2001812
Plaintiff-Appellant, :
vs. :
O P I N I O N.
FABRICATION AUTOMATION, LLC, :
d.b.a. FAST MACHINE TOOLS,
:
Defendant-Appellee. :
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: December 8, 2021
Benjamin, Heather, Iaciofano & Bitter, LLC, and Patrick M. O’Neill, for Plaintiff-
Appellant,
Pinales Stachler Young & Burrell Co., LPA, and Thomas L. Stachler, for Defendant-
Appellee.
OHIO FIRST DISTRICT COURT OF APPEALS
BOCK, Judge.
{¶1} Plaintiff-appellant ProMac Technologies, LLC, (“ProMac”) appeals the
trial court’s entry of summary judgment in favor of defendant-appellee Fabrication
Automation, LLC, d.b.a. Fast Machine Tools (“Fabrication Automation”). We affirm
the trial court’s judgment.
I. Facts and Procedure
A. The Lawsuit
{¶2} In May 2020, ProMac, a limited liability company (“LLC”) registered
in Pennsylvania, sued Fabrication Automation, an Ohio LLC, for breach of contract,
unjust enrichment, and failure to pay commissions in accordance with R.C. 1335.11.
{¶3} Fabrication Automation filed a “Motion to Dismiss Plaintiff’s
Complaint or Alternatively for Summary Judgment,” along with supporting
affidavits. It contended that because ProMac was a foreign LLC that was not
registered in Ohio, it lacked standing under R.C. 1705.58. Therefore, Fabrication
Automation argued, it was entitled to a dismissal of the complaint under Civ.R.
12(B)(1) or summary judgment under Civ.R. 56. Further, Fabrication Automation
asserted that it never had a contractual relationship with ProMac and, because
ProMac sued the wrong party, it had failed to state a claim against Fabrication
Automation.
{¶4} ProMac filed a “Motion for Leave to File First Amended Complaint and
Motion to Add Necessary Parties,” followed by an amended complaint where it added
Fabricating Systems and Technology, Inc. (“Fabricating Systems”) and Skip Doyle as
defendants. ProMac also added counts of fraudulent inducement and piercing the
corporate veil.
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OHIO FIRST DISTRICT COURT OF APPEALS
B. Trial Court’s Judgment
{¶5} The trial court granted ProMac’s motion to amend, allowing it to add
the fraudulent-inducement claim and add Fabricating Systems and Doyle as parties.
It did not permit ProMac to add a piercing-the-corporate-veil claim.
{¶6} Next, the trial court considered whether ProMac had standing to sue
Fabrication Automation in Ohio under R.C. 1705.58. The trial court determined that
ProMac was a Pennsylvania company that was not registered to do business in Ohio.
Next, it found that numerous emails between ProMac and either Fabrication
Automation or Fabricating Systems resulted in a contract in August 2018 under
which ProMac would sell product lines for one of the companies to “potential buyers
in ‘portions of Ohio, Western Pennsylvania, [and] Western New York,’ ” and ProMac
would make commissions from those sales. The trial court found that it was
uncontroverted that ProMac intended to have a longstanding business relationship
with one of these entities, as the record demonstrated that their relationship was not
casual, and that ProMac was in the “beginning stages of conducting continuous
activities on behalf of an Ohio business in a sales region that included Ohio.”
{¶7} Based on these findings, the trial court determined that ProMac had
transacted business in Ohio and, as a foreign LLC that was not registered in Ohio,
R.C. 1705.58 prevented it from maintaining a lawsuit in Ohio. The trial court
therefore granted summary judgment in Fabrication Automation’s favor.
{¶8} ProMac appeals, arguing that a foreign LLC is not required to register
with the Ohio Secretary of State unless it regularly conducts business in the state. It
contends that it did not have “extensive and continuous” contacts requiring it to
register in Ohio. It further argues that genuine issues of material fact exist as to who
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OHIO FIRST DISTRICT COURT OF APPEALS
were the parties to the contract and which parties were necessary to the lawsuit.
II. Standard of Review
{¶9} We conduct a de novo review of a trial court’s order granting summary
judgment. Uren v. Dahoud, 1st Dist. Hamilton No. C-170438, 2021-Ohio-3425, ¶ 16.
Under Civ.R. 56(C), summary judgment is proper when the moving party establishes
that “(1) no genuine issue of any material fact remains, (2) the moving party is
entitled to judgment as a matter of law, and (3) it appears from the evidence that
reasonable minds can come to but one conclusion, and construing the evidence most
strongly in favor of the nonmoving party, that conclusion is adverse to the party
against whom the motion for summary judgment is made.” Id. at ¶12, quoting State
ex rel. Duncan v. Mentor City Council, 105 Ohio St.3d 372, 2005-Ohio-2163, 826
N.E.2d 832, ¶ 9.
III. Law and Analysis
A. ProMac Lacked Standing to File the Claim
{¶10} R.C. 1705.58(A) provides that a “foreign limited liability company
transacting business in this state may not maintain an action or proceeding in any
court of this state until it has registered in this state” in accordance with R.C. 1705.53
through 1705.58. See Mun. Tax Invest., L.L.C v. Pate, 3d Dist. Franklin No. 16AP-
218, 2016-Ohio-7791, ¶ 16, and CACV of Colorado, L.L.C. v. Hillman, 3d Dist. Union
No. 14-09-18, 2009-Ohio-6235.
{¶11} “It is well-recognized * * * that a foreign corporation transacts
business within a state when ‘it has entered the state by its agents and is therefore
engaged in carrying on and transacting through them some substantial part of its
ordinary or customary business, usually continuous in the sense that it may be
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OHIO FIRST DISTRICT COURT OF APPEALS
distinguished from merely casual, sporadic, or occasional transactions and isolated
acts.’ ” State ex rel. Physicians Commt. for Responsible Medicine v. Ohio State Univ.
Bd. of Trustees, 108 Ohio St.3d 288, 2006-Ohio-903, 843 N.E.2d 174, quoting Auto
Driveaway Co. v. Auto Logistics of Columbus, 188 F.R.D. 265 (S.D.Ohio 1999). A
foreign corporation’s activities must be permanent, continuous, and regular to
constitute “doing business” in Ohio. Id.{¶12} In Premier Capital, LLC v. Baker, 11th Dist. Portage No. 2011-P-0041,
2012-Ohio-2834, the court allowed a debt-collection suit to continue in spite of the
plaintiff LLC not being registered with the Ohio Secretary of State. It opined that the
LLC had not been engaging in activities that customarily would be considered
“transacting business” because attempting to collect a debt is not activity that would
require registering with the Ohio Secretary of State before filing the suit. Id. at ¶ 28.
{¶13} ProMac conceded in its brief to this court that it is a foreign LLC that
has not registered with the Ohio Secretary of State, so there is no dispute as to
whether it is a foreign LLC. Therefore, the question is whether ProMac’s activities
constituted “doing business” in Ohio.
{¶14} ProMac maintains that it has not conducted “extensive and continuous
commercial contacts with the state of Ohio” so as to be required to register with the
Ohio Secretary of State to maintain an action for breach of contract in Ohio. But
ProMac’s activities were not casual, sporadic, or occasional.
{¶15} It is undisputed that ProMac and an Ohio LLC—Fabrication
Automation and/or Fabricating Systems—exchanged numerous emails between
January and August 2018 to negotiate the August 2018 contract. This continuous
communication between ProMac and an Ohio LLC resulted in an agreement whereby
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OHIO FIRST DISTRICT COURT OF APPEALS
ProMac would procure sales of products to Ohio customers. The contract does not
reflect an end date to the agreement, which is further indicative of the permanent,
continuous, and regular nature of the business relationship. The record reflects that
ProMac performed at least one sale in Ohio under the contract before ProMac sued
Fabrication Automation, which formed the basis for the lawsuit.
{¶16} Fabrication Automation provided evidence that ProMac, a foreign
LLC, was “carrying on and transacting * * * a substantial part of its ordinary or
customary business” by pursuing and becoming a subagent to sell products for an
Ohio LLC. And ProMac failed to produce any evidence to support its argument that it
was not required to register in Ohio. Therefore, there was no genuine issue of
material fact because the contract required ProMac to provide continuous activities
in Ohio and the lawsuit was based on an Ohio activity. Accordingly, ProMac was
required to register with the Ohio Secretary of State before commencing its action.
Because it was not a properly registered foreign LLC, it lacked standing to bring the
suit. ProMac’s third assignment of error is overruled.
B. Parties to the Contract and to the Lawsuit
{¶17} In ProMac’s first and second assignments of error, it alleges that a
genuine issue of material fact exists as to who the contracting parties were and which
entity is a proper party to the lawsuit. Because this court has overruled the third
assignment of error, the first and second assignments of error are moot and we do
not address them.
IV. Conclusion
{¶18} Promac’s business activities required it to register with the Ohio
Secretary of State before it could maintain a lawsuit in Ohio. Because it failed to do
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OHIO FIRST DISTRICT COURT OF APPEALS
so, it lacked standing. The trial court properly entered summary judgment in
Fabrication Automation’s favor.
{¶19} We note that the trial court erred by granting ProMac’s motion to
amend because the summary judgment disposed of the action. The trial court’s
judgment is affirmed.
Judgment affirmed.
ZAYAS, P.J., and WINKLER, J., concur.
Please note:
The court has recorded its entry on the date of the release of this opinion
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