Continuum Transp. Servs., Ltd. v. Elite Internatl. Corp., L.L.C. ( 2024 )

[Cite as Continuum Transp. Servs., Ltd. v. Elite Internatl. Corp., L.L.C., 2024-Ohio-340.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
CONTINUUM TRANSPORTATION :
SERVICES, LTD.,
:
Plaintiff-Appellee,
: No. 112640
v.
:
ELITE INTERNATIONAL
CORP., LLC, ET AL., :
Defendants-Appellants. :
JOURNAL ENTRY AND OPINION
JUDGMENT: REVERSED, VACATED, AND REMANDED
RELEASED AND JOURNALIZED: February 1, 2024
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-19-917738
Appearances:
Mansour Gavin LPA, Brendon P. Friesen, and Kenneth E.
Smith, for appellee.
Mayle LLC, Andrew R. Mayle, and Benjamin G.
Padanilam, for appellant.
SEAN C. GALLAGHER, J.:
Salvatore (Sam) Marcello appeals the trial court’s decision denying
his motion for relief from judgment based on the insufficiency of process. For the
following reasons, we reverse the decision of the trial court, vacate the judgment
entered against Marcello and remand for further proceedings.
Continuum Transportation Services filed an action against several
defendants, including Elite International Corp. LLC and its purported “owner”
Marcello, in his individual capacity, based on fraud and breach of contract arising
from the parties’ business relationship — Continuum provided transportation
services to the defendants. As is pertinent to this appeal, Continuum served the
complaint on Elite’s statutory agent Sheryl Canty at her 2118 South Plum Grove
Road, Suite 282, Rolling Meadows, Illinois, address (“Rolling Meadows”) in
accordance with Civ.R. 4.1(A) and 4.2(F). Continuum also used Canty’s Rolling
Meadows address to serve Marcello in his individual capacity, sending service of
process to “SAM MARCELLO c/o Sheryl L. Canty, Agent, 2118 South Plum Grove
Road, Suite 282, Rolling Meadows, Illinois 60008.” Throughout the proceedings,
Continuum claimed that Canty’s address was a business address associated with
Marcello.
There are several other related entities. According to Continuum’s
supporting documentation, MMS Holding, Inc. is the designated “manager” of Elite,
with MMS being a reverse anagram of Marcello’s initials. It is unclear who owns
MMS Holding. The documentation presented by Continuum simply notes that the
president and officer of MMS Holding is Michael Grimes, who is located at
271 E. North Avenue, Glendale Heights, Illinois (“Glendale Heights”). No
shareholder for the corporation is listed. Canty was also the statutory agent for
MMS Holding and MMS Holding 2 Inc., the latter of which indicated that Marcello
was the president and officer of the corporation, which is also located at the Glendale
Heights address. Canty used the Rolling Meadows address as the statutory agent
for the MMS Holding entities.
Canty withdrew as statutory agent for Elite in April 2021, after
Continuum completed service of the second amended complaint to her on behalf of
Elite and Marcello individually.
Continuum filed a motion for default against Elite and Marcello after
they failed to appear in the action. The trial court granted default judgment in
Continuum’s favor, entering a judgment of $51,003.57 in compensatory damages,
$102,007.14 in punitive damages, $26,043 in attorney fees, and $350.10 in costs
against Elite and Marcello, jointly and severally.
Continuum sought to collect the judgment in an Illinois state court
action. Marcello eventually appeared in that action and filed a document captioned
as “Motion to Dismiss Rule to Show Cause and Citation to Discovery Assets and a
Motion to Vacate Foreign Judgment as Void with the Illinois Court,” claiming that
he was never properly served in the Ohio action. The Illinois state court denied the
motion but stayed the proceedings pending Marcello’s attempt to vacate the
judgment in the underlying action. Marcello filed a motion styled as a Civ.R. 60(B)
motion for relief from judgment, which included an affidavit wherein he swore that
he never received the underlying complaint, that he never worked or maintained an
office at the Rolling Meadows address, and that he never appointed Canty “to be my
‘agent’ to accept personal service on my behalf.” Marcello also provided several
statements that are best described as vacuous truths:1 (1) that he never “lived” at the
Rolling Meadows address; (2) that Canty was once a registered agent for “Kal-El
Consulting,” but that entity was dissolved; (3) that he was never personally served
with the complaint at his residence; and (4) that he never lived at 101 Driscoll Lane,
Unit 7, in Wood Dale, Illinois.
The trial court denied the motion for relief from judgment against
Marcello, and this appeal followed.
A court must obtain personal jurisdiction over a defendant before a
final judgment may be rendered. Youngstown City Demolition v. Rainy Day
Rentals, 7th Dist. Mahoning No. 22 MA 0112, 2023-Ohio-3601, ¶ 12, citing
Maryhew v. Yova, 11 Ohio St.3d 154, 156, 464 N.E.2d 538 (1984). Personal
jurisdiction is obtained through perfecting service of process or a voluntary
appearance and submission to the jurisdiction of the court. Id. A judgment
rendered without jurisdiction is void.
For this reason, and although insufficiency of service of process may
be raised in a Civ.R. 60(B) motion, the party seeking relief “need not meet the
requirements of establishing a meritorious defense or that the motion was timely
filed under Civ.R. 60(B).” Adams v. McElroy, 8th Dist. Cuyahoga No. 105399,
2018-Ohio-89, ¶ 12-15, citing Hook v. Collins, 8th Dist. Cuyahoga No. 104825,
1 Although the statements are arguably true, they have no bearing on any fact of
consequence related to arguments in favor of Continuum having perfected service.
2017-Ohio-976, ¶ 12, and CompuServe, Inc. v. Trionfo, 91 Ohio App.3d 157, 161, 631
N.E.2d 1120 (10th Dist.1993). Granting a default judgment without first obtaining
service over the defendant renders that judgment to be void. Id. In that situation,
the party seeking relief is entitled to have the judgment vacated and the case
reopened. Id., citing Broadvox, L.L.C. v. Oreste, 8th Dist. Cuyahoga No. 92064,
2009-Ohio-3466, ¶ 12. Appellate review of a decision denying a motion to vacate a
purportedly void judgment is for an abuse of discretion. Adams, citing Hook at ¶ 10;
Miley v. STS Sys., 153 Ohio App.3d 752, 2003-Ohio-4409, 795 N.E.2d 1254, ¶ 7
(10th Dist.); and Hoffman v. New Life Fitness Ctrs., 116 Ohio App.3d 737, 739, 689
N.E.2d 84 (3d Dist.1996).
Nothing within Civ.R. 4.1 requires service to be completed on the
individual defendant to whom the mailing is addressed, nor is it tied to any one
location. “Service of process must be made in a manner reasonably calculated to
apprise interested parties of the action and to afford them an opportunity to
respond.” Hook, 8th Dist. Cuyahoga No. 104825, 2017-Ohio-976, at ¶ 13, citing
Akron-Canton Regional Airport Auth. v. Swinehart, 62 Ohio St.2d 403, 406, 406
N.E.2d 811 (1980). Individuals can be served at their “usual place of residence” or a
business address, and any person residing at that address who is of “suitable age and
discretion” may receive such service. Civ.R. 4.1(A); Civ.R. 4.2(F). Service of process
is, therefore, not limited to being completed on the named defendant to whom the
summons is directed. New v. All Transp. Solution, Inc., 177 Ohio App.3d 620,
2008-Ohio-3949, 895 N.E.2d 606, ¶ 11 (10th Dist.). In New, for example, service of
process was completed when the returns demonstrated that the certified mail to the
individual defendant and the corporate entity he owned were received at their legal
addresses, both being the defendant’s residence, even though the certified mail was
received by the defendant’s wife. Id.In order for the service on an individual to comply with due process
requirements, the service of process must be made “in a manner reasonably
calculated to apprise interested parties of the action and to afford them an
opportunity to respond.” Hook at ¶ 13, citing Swinehart. The reasonably calculated
analysis bears on “where” service must be sent, not to whom. Swinehart at 405
(concluding that although service is deemed complete when received by “someone
other than the named addressee, thus dealing with the question of who may be
served, it does not speak to the issue of where service by certified mail may be sent”
(Emphasis sic.)). “The plaintiff bears the burden of obtaining proper service on a
defendant.” Carter-Jones Lumber Co. v. Meyers, 2d Dist. Clark No. 2005-CA-97,
2006-Ohio-5380, ¶ 11, citing Cincinnati Ins. Co. v. Emge, 124 Ohio App.3d 61, 63,
705 N.E.2d 408 (1st Dist.1997). “In those instances where the plaintiff follows the
Civil Rules governing service of process, courts presume that service is proper unless
the defendant rebuts this presumption with sufficient evidence of non-service.” Id.In this appeal, Continuum largely ignores the fact that service of
process was sent to Canty on behalf of Marcello, indicated by the use of the “c/o” or
“care of” designation in the complaint and summons. “Use of the phrase ‘c/o,’ which
means ‘care of,’ is commonly used to designate mail that should be sent to a person
through a third party.” Maggio v. Wisconsin Ave. Psych. Ctr., Inc., 417
U.S.App.D.C. 320, 327, 795 F.3d 57 (2015) (Rogers, J., dissenting), citing Webster’s
Third New International Dictionary 338 (1993); Buckeye Foods v. Cuyahoga Cty.
Bd. of Revision, 78 Ohio St.3d 459, 462, 678 N.E.2d 917 (1997). That designation
bears on the question of who may be served. Thus, Continuum attempted to serve
Marcello by directing service to be made through a third party or agent. That
distinguishes this case from New, in which service was addressed and sent to the
individual defendant but was received by the defendant’s wife at the defendant’s
legal address, which under the express language of Civ.R. 4.1(A)(1)(a) is deemed
complete because it was received by “any person.” See New at ¶ 1. In this case, the
service of process for Marcello was directed through Canty; it was not sent to
Marcello.
Civ.R. 4.2(A) provides that service of process “shall be made * * *
upon an individual * * * by serving the individual.” Under Civ.R. 4(B), the summons
and complaint “shall be * * * directed to the defendant.” See King v. Hazra, 91 Ohio
App.3d 534, 536, 632 N.E.2d 1336 (9th Dist.1993) (service of complaint directed
through defendant’s attorney did not comply with Civ.R. 4.1 through 4.6); Gooch v.
Toth, 8th Dist. Cuyahoga No. 71061, 1997 Ohio App. LEXIS 1054, 8 (Mar. 20, 1997)
(approvingly citing Hazra). There are notable exceptions for persons under the age
of 16 years of age or those deemed incompetent. Service of process for those classes
of individuals must be made upon an agent, defined as a guardian, parent or
individual having care of the person unless certain exceptions apply.
Civ.R. .2(B)-(E). Civ.R. 4.2(A) does not contemplate sending service of process
through an agent or third party, as demonstrated by the rule’s express allowance for
service on a guardian or agent in certain circumstances but omitting that exception
for an individual under division (A) of the rule.2 Castellano v. Kosydar, 42 Ohio
St.2d 107, 110, 326 N.E.2d 686 (1975) (service of process sent through certified mail
need not be signed by the addressee for service to be deemed complete).
By way of illustration, the Federal Rules of Civil Procedure permit
individual defendants to be served through an agent. See Fed.R.Civ.P. 4(e)(2)(c);
Harris v. Smith, 6th Cir. No. 22-1682, 2023 U.S. App. LEXIS 8152, 4 (Apr. 5, 2023).
Harris involved a plaintiff’s attempt to serve several individually named defendants
through the corporate counsel. Service in that case was made by sending the service
to the individual defendants “c/o” their general counsel, which implicated the
agency question. Unlike its federal counterpart, Civ.R. 4.2(A) does not include
express authorization for service of process on an individual to be made through that
individual’s agent.
Canty was the authorized agent to receive service of process on behalf
of several corporate entities; however, Continuum has presented no authority that
authorizes service upon the statutory agent on behalf of an individual or employee
2 There are statutory exceptions to this general notion, such as R.C. 2703.20. That
statute, creating a special statutory proceeding, authorizes service of process through the
Ohio Secretary of State for nonresident owners and operators of motor vehicles. Anson v.
Tyree, 22 Ohio St.3d 223, 225, 490 N.E.2d 593 (1986). Continuum has not cited any
applicable statutory exception authorizing service of process through an agent for its
purposes. See App.R. 16(A)(7). This decision is constrained by the arguments presented.
associated with the corporate entity. See R.C. 1701.07(A) (“Every corporation shall
have and maintain an agent, sometimes referred to as the “statutory agent,” upon
whom any process, notice, or demand required or permitted by statute to be served
upon a corporation may be served.” (Emphasis added.)). Under general principles,
“any information received by a corporation’s statutory agent is imputed to the
corporation, [but] not to any specific officer, director, employee or agent of the
corporation.” Cent. Funding, Inc. v. Compuserve Interactive Servs., Inc., 10th Dist.
Franklin No. 02AP-972, 2003-Ohio-5037, ¶ 34, citing Akron-Canton Waste Oil, Inc.
v. Safety-Kleen Oil Serv., Inc., 81 Ohio App.3d 591, 603, 611 N.E.2d 955 (9th
Dist.1992).
In addition, Civ.R. 4.2(F) differentiates between two types of service.
Service of process may be made upon the corporation by serving the authorized
agent or by serving the corporation at any of its usual places of business.
Civ.R. 4.2(F). The use of the disjunctive indicates mutually exclusive alternatives.
State ex rel. Rear Door Bookstore v. Tenth Dist. Court of Appeals, 63 Ohio St.3d
354, 361, 588 N.E.2d 116 (1992), citing Webster’s Third New International
Dictionary 651 (1986). Civ.R. 4.2(F) contemplates separate methods and locations
to initiate service on a corporate entity: either serve an employee at the corporation’s
usual place of business or serve the statutory agent at the address provided by the
agent. Under Civ.R. 4.2(A), however, service is completed on an individual by
serving that individual. Absent authority demonstrating otherwise, it does not
appear that service upon a statutory agent of a corporate entity is an authorized
method of service as it relates to an individual defendant under Civ.R. 4.2(A).
Notwithstanding, the primary argument in this appeal is focused on
where service of process was made. Our focus is not on who was served in this case,
which was Canty who was purportedly to accept the service on behalf of Marcello,
but instead it is where that summons was directed. Under Swinehart, if service is
directed to a defendant at an address at which they live, regularly conduct business,
or are employed, service of process can be found to be reasonably calculated to reach
the named defendant.
Marcello offered evidence that he neither resided nor maintained an
office at the Rolling Meadows address. Continuum claims that Canty’s address was
a business address associated with Marcello. According to Continuum’s
documentation, Elite’s place of business is located at the Glendale Heights location,
the same address Marcello used for the purposes of the other corporate entities to
which he is associated. Continuum’s primary argument in favor of maintaining the
judgment against Marcello in his individual capacity is that the service of process
was delivered to Marcello’s usual place of business, a type of location deemed to be
reasonably calculated to apprise an individual of the pending action.
No one disputes that service upon an individual that is sent to a usual
place of business can comport with due process requirements because the party
being served has a habitual, continuous, or highly continual and repeated physical
presence at the business address. Chuang Dev. LLC v. Raina, 2017-Ohio-3000, 91
N.E.3d 230, ¶ 35 (10th Dist.), citing Swinehart at 406. Service of process at such a
location is reasonably anticipated to provide the defendant with the requisite notice.
The statutory agent’s address, however, does not necessarily establish a place of
business for a corporate entity’s employees because service upon a person under
Civ.R. 4.2(A) contemplates individual service. See, e.g., A.O. Smith Corp. v.
Perfection Corp., 10th Dist. Franklin No. 03AP-266, 2004-Ohio-4041, ¶ 16 (service
of a subpoena upon a corporation’s statutory agent does not effectuate service upon
an individual employee since Civ.R. 45 contemplates individual service).
There is no evidence that Marcello ever frequented Canty’s address,
much less that he had a continuous and repeated presence at that address for the
purposes of service of process. Although we agree with Continuum that an
individual may be served at their usual place of business in order to perfect service
of process, it has not been established that the Rolling Meadows location was such
a place with respect to Marcello. The Ohio Supreme Court concluded that service
was not reasonably calculated to apprise the defendant of the pending action
because service was sent to a location for which the defendant “did not maintain an
office on the premises of the business,” and his usual place of business was in fact in
another location.” Swinehart, 62 Ohio St.2d at 406-407.
The service of process addressed to Canty on behalf of Marcello,
which in this case was sent through certified mail under Civ.R. 4.1(A), was
insufficient to perfect service against Marcello in his individual capacity because
Continuum failed to establish that Canty’s Rolling Meadows address was a usual
place of business for Marcello.
Service was never perfected according to the civil rules, so the
presumption of proper service never arose. The motion for relief from judgment
should have been granted, and the trial court erred in concluding otherwise. The
judgment against Marcello is hereby vacated, and the matter remanded for further
proceedings consistent with this opinion.
Reversed, vacated, and remanded.
It is ordered that appellant recover of appellee costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the
common pleas 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.
______________________
SEAN C. GALLAGHER, JUDGE
ANITA LASTER MAYS, P.J., and
MICHELLE J. SHEEHAN, J., CONCUR