Groll Furniture Co. v. Epps , 2009 Ohio 3533 ( 2009 )

[Cite as Groll Furniture Co. v. Epps, 2009-Ohio-3533.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
MARION COUNTY
GROLL FURNITURE CO.,
PLAINTIFF-APPELLEE, CASE NO. 9-09-13
v.
RICHARD EPPS, ET AL., OPINION
DEFENDANTS-APPELLANTS.
Appeal from Marion Municipal Court
Trial Court No. 08CV2410
Judgment Affirmed
Date of Decision: July 20, 2009
APPEARANCES:
Richard M. Epps for Appellants
Frederick M. Issac and Brandi L. Dorgan for Appellee
Case No. 9-09-13
ROGERS, J.
{¶1} Defendant-Appellants, Richard and Beverly Epps, appeal the
judgment of the Marion County Municipal Court granting judgment in favor of
Groll Furniture Co. On appeal, the Epps argue that the Marion County Municipal
Court lacked subject matter jurisdiction; that venue was not proper in Marion
County; and, that Groll Furniture’s corporate officer did not sufficiently
demonstrate her status as a bona fide officer pursuant to R.C. 1925.17. Based
upon the following, we affirm the judgment of the trial court.
{¶2} In October 2008, Pamela Riley filed a complaint/affidavit in the
Marion County Municipal Court on behalf of Groll Furniture, stating that the Epps
owed an outstanding balance of $1,196.44 to Groll Furniture for a desk/hutch unit
that had been in their possession since November 2007. Riley indicated that she
was filing on behalf of Groll Furniture by checking a box on the
complaint/affidavit designating herself as a bona fide officer of the company.
{¶3} In December 2008, the matter proceeded to trial before a magistrate.
Although the Epps did not provide this Court with a transcript of the trial, the
magistrate’s proposed decision reveals that, at trial, the Epps contended that,
because their furniture was delivered so quickly, they believed the pieces were
already in stock at Grolls and were not specially built for them as requested.
Additionally, the Epps contended that Riley failed to prove her corporate capacity;
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that “Groll Furniture Co.” lacked capacity to bring a claim because they purchased
the furniture from “Grolls Fine Furniture”; and, that the matter regarded a breach
of contract claim that occurred in Franklin County, when payment was not made
upon delivery. Groll Furniture responded by producing factory shipping records
reflecting that the pieces were specially ordered and not shipped from its existing
sales stock.
{¶4} Thereafter, the magistrate determined that the undisputed facts were
that Groll Furniture Co. was registered under the trade name “Grolls”; that, in
October 2007, at Grolls’ showroom, the Epps purchased a new entertainment
center and hutch via special order; that both pieces were delivered to the Epps in
November 2007; that, at the time of delivery, the Epps noted problems with both
of the pieces, and Grolls did not require the Epps to pay the balance upon delivery
because of the problems; that the entertainment center was eventually corrected to
the Epps’ satisfaction and they completed payment for that piece in May 2008;
and, that the Epps remained dissatisfied with the hutch and refused to pay the
balance of $1,196.44 claimed by Grolls. The magistrate concluded that the pieces
of furniture were not taken out of Grolls’ existing stock, but were appropriately
ordered from the factory per the Epps’ request; that Riley demonstrated that she
was the president of Grolls through her own sworn testimony; that the Epps
presented no evidence suggesting Riley was not the president of Grolls; that Grolls
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had capacity to sue for the debt in question because the designation “fine
furniture” was merely a byline for “Grolls,” a properly registered trade name of
Groll Furniture; and, that venue was appropriate in Marion County because
payment was due to Grolls in Marion County once the pieces were corrected.
Accordingly, the magistrate recommended the trial court grant judgment in favor
of Grolls and against the Epps in the amount of $1,196.44.
{¶5} In January 2009, the Epps filed objections to the proposed decision
of the magistrate, arguing that Riley’s testimony that she was a bona fide officer of
a corporation was insufficient under R.C. 1925.17; that Franklin County was the
proper venue for the action because the breach occurred in Franklin County; and,
that Riley lacked capacity to sue because she testified that Grolls was out of
business by summer 2008. Thereafter, the trial court overruled the Epps’
objections, finding that the magistrate made no errors of law. Additionally, the
trial court adopted the decision of the magistrate and ordered the Epps to pay
Grolls $1,196.44, with interest at the statutory rate of 5% from the date of the
judgment.
{¶6} It is from this judgment that the Epps appeal, presenting the
following assignments of error for our review.
Assignment of Error No. I
THE LOWER COURT DID NOT HAVE SUBJECT MATTER
JURISDICTION OF THIS CASE UNDER THE DEFINITION
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OF SUBJECT MATTER JURISDICTION SET FORTH IN
CHEAP ESCAPE COMPANY INC. VS. HADDOX, LLC 120
OHIO ST.3D 493 (DEC. 11, 2008).
Assignment of Error No. II
THE MARION COUNTY MUNICIPAL COURT ERRED AS A
MATTER OF LAW IN HEARING THIS CASE BECAUSE
VENUE WAS NOT PROPER IN MARION COUNTY;
PROPER VENUE OF THE CASE WAS IN FRANKLIN
COUNTY.
Assignment of Error No. III
THE MARION MUNICIPAL COURT ERRED AS A MATTER
OF LAW BY ALLOWING PLAINTIFF TO FILE A CLAIM IN
THE SMALL CLAIMS DIVISION WITHOUT REQUIRING
PLAINTIFF, AS AN ELEMENT OF PLAINTIFF’S CLAIM,
TO ESTABLISH THAT GROLL’S FURNITURE COMPANY
WAS REPRESENTED BY A BONA FIDE OFFICER OF THE
CORPORATION.
{¶7} Due to the nature of the Epps’ arguments, we elect to address their
first and second assignments of error together.
Assignments of Error Nos. I & II
{¶8} In their first and second assignments of error, the Epps contend that
the Marion County Municipal Court lacked subject-matter jurisdiction over this
case and that Franklin County was the appropriate venue instead of Marion
County. Specifically, the Epps cite Cheap Escape Co., Inc. v. Haddox, LLC, 120
Ohio St.3d 493, 2008-Ohio-6323, for the proposition that subject-matter
jurisdiction is limited to the court with territorial connection to the relevant events,
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which here, they contend, the only relevant event was the breach of contract,
occurring in Franklin County. We disagree.
{¶9} Whether a trial court has subject-matter jurisdiction over a case is a
question of law reviewed de novo. Jones v. Jones, 179 Ohio App.3d 618, 2008-
Ohio-6069, ¶19, citing Radcliffe v. Radcliffe, 3d Dist. No. 6-01-05, 2001-Ohio-
2332. When determining a question of law de novo, this Court may substitute,
without deference, its judgment for that of the trial court. Castlebrook, Ltd. v.
Dayton Properties Ltd. Partnership (1992), 78 Ohio App.3d 340, 346.
{¶10} “‘Subject-matter jurisdiction of a court connotes the power to hear
and decide a case upon its merits’ and ‘defines the competency of a court to render
a valid judgment in a particular action.’” Cheap Escape, 120 Ohio St.3d at 495,
quoting Morrison v. Steiner (1972), 32 Ohio St.2d 86, 87. The subject-matter
jurisdiction of municipal courts is set forth statutorily by R.C. 1901.18, providing,
in pertinent part:
(A) Except as otherwise provided in this division or section
1901.181 of the Revised Code, subject to the monetary
jurisdiction of municipal courts as set forth in section 1901.17 of
the Revised Code, a municipal court has original jurisdiction
within its territory in all of the following actions or proceedings
and to perform all of the following functions:
***
(3) In any action at law based on contract, to determine,
preserve, and enforce all legal and equitable rights involved in
the contract, to decree an accounting, reformation, or
cancellation of the contract, and to hear and determine all legal
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and equitable remedies necessary or proper for a complete
determination of the rights of the parties to the contract[.]
R.C. 1901.18(A)(3); See, also, Cheap Escape, 120 Ohio St.3d at 495.
{¶11} In Cheap Escape, the Supreme Court of Ohio recently clarified R.C.
1901.18, finding that “the phrase ‘original jurisdiction within its territory in all of
the following actions’ means that a municipal court may hear only those matters
listed in R.C. 1901.18(A)(1) through (12) that have a territorial connection to the
court.” 120 Ohio St.3d at 497.
{¶12} In Cheap Escape, the Supreme Court concluded that the Franklin
County Municipal Court lacked subject-matter jurisdiction over a contract dispute.
In that case, both parties agreed that all of the events relevant to the transaction
occurred outside of Franklin County, and that the only connection to Franklin
County was a forum-selection clause in the contract, which provided that the
proper venue for litigation was with the Franklin County Municipal Court or
Franklin County Common Pleas Court. The Supreme Court held that R.C.
1901.18(A) “limits municipal court subject-matter jurisdiction to actions or
proceedings that have a territorial connection to the court. Because the parties
admittedly did not have territorial connections to the Franklin County Municipal
Court, the court lacked subject-matter jurisdiction in [the] matter.” 120 Ohio St.3d
at 498.
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{¶13} We find the facts before us to be clearly distinguishable from Cheap
Escape. Here, the transaction at issue had multiple territorial connections to
Marion County, including that Grolls was located in Marion County, and that the
parties entered into the agreement to purchase furniture at Grolls’ showroom in
Marion County. See, also, Cheap Escape Co. v. Tri-State Constr., LLC, 173 Ohio
App.3d 683, 2007-Ohio-6185 (finding subject matter jurisdiction existed in
Franklin County, where the parties executed the contract, as distinguished from
Cheap Escape v. Haddox, supra, where no relevant events occurred in Franklin
County). Thus, we conclude that the trial court did not err in finding that the
Marion County Municipal Court had subject-matter jurisdiction over this action.
{¶14} Next, we turn to the Epps’ argument that the Marion County
Municipal Court was an inappropriate venue. “‘[V]enue connotes the locality
where the suit should be heard.’” Motorists Mutual Ins. Co. v. Grimes, 5th Dist.
No. 2003CA00257, 2004-Ohio-1287, ¶23, quoting Morrison, 32 Ohio St.2d at 87.
“‘Venue is proper when the plaintiff chooses a court located in any county
described in the first nine provisions of Civ.R. 3(B).’” Id., quoting Soloman v.
Excel Marketing, Inc. (1996), 114 Ohio App.3d 20, 25. Civ.R. 3(B) provides, in
pertinent part:
Any action may be venued, commenced, and decided in any
court in any county. When applied to county and municipal
courts, “county,” as used in this rule, shall be construed, where
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appropriate, as the territorial limits of those courts. Proper
venue lies in any one or more of the following counties:
***
(3) A county in which the defendant conducted activity that gave
rise to the claim for relief;
***
(6) The county in which all or part of the claim for relief arose[.]
***
(Emphasis added).
{¶15} Under Civ.R. 3(B)(3) and 3(B)(6), courts have held that, where a
contract dispute is at issue, venue lies in the territory in which the contract was
formed between the parties. Morrison, 32 Ohio St.2d at 89; Jade, Inc. v. Mathews,
5th Dist. No. 07 CA 38, 2008-Ohio-4762, ¶46; Stern v. Cleveland Browns
Football Club, Inc., 11th Dist. No. 95-L-196, 1996 WL 761163. Here, the
magistrate found that the Epps purchased a new entertainment center and hutch at
the Grolls’ showroom, which was located in Marion County. The Epps did not
dispute this finding in their objections to the magistrate’s proposed decision.
Accordingly, as the Epps entered into the agreement to purchase the furniture in
Marion County, the trial court did not err in concluding that the Marion County
Municipal Court was a proper venue.
{¶16} We note that the Epps are correct in their assertion that venue would
be appropriate in Franklin County, as this was their county of residence and the
breach may have occurred there. See Civ.R. 3(B). However, Civ.R. 3(B) clearly
provides that proper venue may lie in more than one county. Thus, the fact that
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Franklin County would have been an appropriate venue under Civ.R. 3(B) does
not preclude Marion County from being an appropriate venue.
{¶17} Accordingly, we overrule the Epps’ first and second assignments of
error.
Assignment of Error No. III
{¶18} In their third assignment of error, the Epps contend that the trial
court erred by allowing Riley to file a claim in the small claims division without
requiring her to establish that she was a bona fide officer of Grolls. Specifically,
the Epps argue that a corporate officer presenting a claim in the small claims
division must demonstrate she is a bona fide officer under R.C. 1925.17 by means
other than her own sworn testimony, such as by submitting a writing or some
documentation. We disagree.
{¶19} R.C. 1925.171 provides that:
A corporation which is a real party in interest in any action in a
small claims division may commence such an action and appear
therein through an attorney at law. Such a corporation may,
through any bona fide officer or salaried employee, file and
present its claim or defense in any action in a small claims
division arising from a claim based on a contract to which the
corporation is an original party or any other claim to which the
corporation is an original claimant, provided such corporation
does not, in the absence of representation by an attorney at law,
1
We note that several courts previously held R.C. 1925.17 to be unconstitutional, including Alliance
Group, Inc. v. Rosenfield (1996), 115 Ohio App.3d 380, and Norwalk MK, Inc. v. McCormick, 6th Dist. No.
H-04-041, 2005-Ohio-2493, abrogation recognized by Sarcom, Inc. v. 1650 Indian Wood Circle, Ltd., 6th
Dist. No. L-05-1115, 2005-Ohio-6139; however, the Supreme Court of Ohio has since held that the statute
is not unconstitutional under the narrow circumstances it sets forth. Cleveland Bar Assn. v. Pearlman, 106
Ohio St.3d 136, 2005-Ohio-4107.
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engage in cross-examination, argument, or other acts of
advocacy.
{¶20} In this case, no evidence contradicted Riley’s testimony that she was
Grolls’ president, and we find that the trial court did not err in accepting her sworn
testimony as satisfaction of R.C. 1925.17. R.C. 1925.17 does not require any
specific evidence, and the Epps cite no case law or other statute requiring such an
officer to present any evidence other than her own sworn testimony to establish
herself as a bona fide officer pursuant to R.C. 1925.17. Furthermore, the Sixth
Appellate District has found the bona fide officer requirement to be satisfied based
upon the officer’s sworn testimony. See Norwalk MK, Inc. v. McCormick, 170
Ohio App.3d 147, 2006-Ohio-4640, ¶14; Sarcom, Inc. v. 1650 Indian Wood
Circle, Ltd., 6th Dist. No. L-05-1115, 2005-Ohio-6139, ¶16. For these reasons,
we decline to adopt the Epps’ proposed rule that the officer must submit a writing
or documentation as evidence of her bona fide status.
{¶21} Accordingly, we overrule the Epps’ third assignment of error.
{¶22} Having found no error prejudicial to the Appellants herein, in the
particulars assigned and argued, we affirm the judgment of the trial court.
Judgment Affirmed
PRESTON, P.J. and WILLAMOWSKI, J., concur.
/jlr
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