Goodrich Corp. v. PolyOne Corp. , 2016 Ohio 1068 ( 2016 )

[Cite as Goodrich Corp. v. PolyOne Corp., 2016-Ohio-1068.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
GOODRICH CORPORATION C.A. No. 27691
Appellant
v. APPEAL FROM JUDGMENT
ENTERED IN THE
POLYONE CORPORATION, et al. COURT OF COMMON PLEAS
COUNTY OF SUMMIT, OHIO
Appellees CASE No. CV 2014 03 1308
DECISION AND JOURNAL ENTRY
Dated: March 16, 2016
HENSAL, Presiding Judge.
{¶1} Plaintiff-Appellant, Goodrich Corporation, appeals from a judgment of the
Summit County Court of Common Pleas, dismissing its claims for lack of personal jurisdiction
and failure to join a necessary party. For the following reasons, we affirm in part, and reverse in
part.
I.
{¶2} Goodrich Corporation (“Goodrich”) previously owned and operated a chemical
manufacturing site (the “Site”) in Calvert City, Kentucky, but sold a portion of it to Westlake
Vinyls, Inc. (“Westlake Vinyls”). Westlake Vinyls owns a majority of the Site, and PolyOne
Corporation (“PolyOne”) owns a smaller portion. The Site was required to undergo
environmental remediation, which resulted in extensive litigation between Goodrich, PolyOne,
and Westlake Vinyls. The litigation was commenced in the United States District Court for the
Western Division of Kentucky (Paducah Division) between 2003 and 2007, and involved the
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allocation of cleanup costs incurred at the Site. That case resolved in a settlement agreement.
See Westlake Vinyls, Inc. v. Goodrich Corp., W.D. Ky. No. 5:03CV-240-R.
{¶3} While that case was pending, Goodrich pursued an action in the Summit County
Court of Common Pleas against its insurers for reimbursement of costs it incurred – and would
continue to incur – to remediate the Site. See B.F. Goodrich Corp. v. Commercial Union Ins.
Co., Summit C.P. No. CV 1999-02-0410. Goodrich obtained a favorable judgment and, by
contract, PolyOne is entitled to a portion of the payments Goodrich receives from its insurer.
{¶4} Relevant to this appeal, the settlement agreement from the Kentucky litigation
provides for arbitration between Westlake Vinyls and PolyOne, and contains a forum-selection
clause designating the United States District Court for the Western District of Kentucky
(Paducah Division) as the exclusive forum for any action or proceeding “arising out of or
relating to” the settlement agreement. Although Goodrich is a party to the settlement agreement,
it is not a party to the arbitration provisions found therein.
{¶5} In 2010, pursuant to the settlement agreement, PolyOne initiated an arbitration
proceeding against Westlake Vinyls to recover certain costs PolyOne incurred related to the Site
cleanup. As part of the ongoing discovery process, Westlake Vinyls requested documents from
PolyOne relating to insurance coverage for the environmental liabilities incurred at the Site.
Notably, the terms of the settlement agreement prohibit PolyOne from “assert[ing] any privilege
over information regarding insurance recoveries.” According to PolyOne, it produced a number
of documents related to insurance recoveries to Westlake Vinyls, but, at the direction of
Goodrich, withheld select documents that Goodrich maintains are privileged.
{¶6} Although it is not a party to the arbitration, Goodrich objected to Westlake
Vinyls’ request, arguing that it implicates privileged, confidential, or otherwise protected
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documents involved in Goodrich’s state-court action, which it shared with PolyOne. Despite
Goodrich being a nonparty, the arbitrators, Hon. Gordon Doerfer (Ret.), Eric Van Loon, and
William Hartgering (collectively, the “Arbitration Panel”), considered Goodrich’s arguments, but
ultimately determined that both PolyOne and Goodrich failed to establish that the requested
documents were entitled to any privilege. The Arbitration Panel, therefore, ordered PolyOne to
produce the requested documents.
{¶7} Shortly thereafter, Goodrich filed a complaint in the Summit County Court of
Common Pleas, seeking an injunction to prevent PolyOne from producing the documents. See
Goodrich Corp. v. PolyOne Corp., Summit C.P. No. CV-2014-03-1308. In addition to PolyOne,
Goodrich named Westlake Chemical Corp. (“Westlake Chemical”) and the Arbitration Panel as
defendants. Goodrich obtained a temporary restraining order preventing: (1) PolyOne from
producing the documents; (2) Westlake Chemical from seeking the documents; and (3) the
Arbitration Panel from enforcing its discovery ruling.
{¶8} A few days later, Westlake Chemical removed the case to the United States
District Court for the Northern District of Ohio on the basis of diversity jurisdiction. The Ohio
District Court then transferred the case to the United States District Court Western District of
Kentucky. In doing so, the Northern District of Ohio found that “the case at bar arises out of [a]
discovery dispute” and, thus, was subject to the forum-selection clause contained in the
settlement agreement.
{¶9} The Western District of Kentucky, however, transferred the case to the Summit
County Court of Common Pleas, finding that removal to federal court was improper because
PolyOne, an Ohio citizen, did not consent to removal. Upon returning to state court, both
Westlake Chemical and the Arbitration Panel moved to dismiss the action. PolyOne did not
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move for dismissal. The trial court granted Westlake Chemical and the Arbitration Panel’s
respective motions and dismissed the entire action with prejudice, including Goodrich’s claims
against PolyOne. Goodrich appealed, raising four assignments of error for our review. Goodrich
and the Arbitration Panel subsequently filed a joint motion to dismiss the appeal against the
Arbitration Panel only, which we granted. We, therefore, will not address Goodrich’s arguments
as they relate to the Arbitration Panel. Additionally, we have combined assignments of error two
and three for ease of consideration.
II.
ASSIGNMENT OF ERROR I
THE TRIAL COURT INCORRECTLY DISMISSED GOODRICH’S CLAIMS
AGAINST THE OUT-OF-STATE DEFENDANTS.
{¶10} In its first assignment of error, Goodrich argues that the trial court erred by
dismissing its claims for lack of personal jurisdiction. By way of summary, Westlake Chemical
argued in its motion to dismiss that the trial court lacked personal jurisdiction, that it was not a
proper party to the lawsuit, and that the necessary party, Westlake Vinyls, Inc., could not be
joined.
{¶11} In response, Goodrich argued that Westlake Chemical waived the defense of lack
of personal jurisdiction, and that the trial court had jurisdiction under Ohio’s long-arm statute.
See R.C. 2307.382. Additionally, Goodrich argued that it properly named Westlake Chemical as
a defendant because the Arbitration Panel’s orders were addressed to Westlake Chemical, not
Westlake Vinyls. In the alternative, Goodrich argued that the trial court should permit it to
amend its pleadings to name Westlake Vinyls as a defendant. The trial court determined that:
(1) Westlake Chemical did not waive its right to assert lack of personal jurisdiction; (2) Westlake
Chemical was not subject to Ohio’s long-arm statute because it did not commit a tort in Ohio;
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and (3) the court’s exercise of jurisdiction over Westlake Chemical would not comport with the
requirements of due process.
{¶12} “Personal jurisdiction is a question of law that appellate courts review de novo.”
Fraley v. Estate of Oeding, 138 Ohio St. 3d 250, 2014-Ohio-452, ¶ 11. “A de novo review
requires an independent review of the trial court’s decision without any deference to the trial
court’s determination.” State v. Ross, 9th Dist. Summit No. 26694, 2014–Ohio–2867, ¶ 33,
quoting State v. Consilio, 9th Dist. Summit No. 22761, 2006–Ohio–649, ¶ 4.
{¶13} “The determination [of] whether an Ohio court has personal jurisdiction over an
out-of-state defendant requires a two-step inquiry. First, the court must determine whether the
defendant’s conduct falls within Ohio’s long-arm statute or the applicable civil rule. If it does,
then the court must consider whether the assertion of jurisdiction over the nonresident defendant
would deprive the defendant of due process of law under the Fourteenth Amendment to the
United States Constitution.” (Internal citations omitted.) Fraley at ¶ 12. This Court need not
address the second step of this inquiry, however, because the alleged conduct does not fall within
Ohio’s long-arm statute or Civil Rule 4.3.
{¶14} Ohio’s long-arm statute enumerates specific conduct that gives rise to personal
jurisdiction. R.C. 2307.382. Section 2307.382(A)(6), upon which Goodrich relies, provides:
A court may exercise personal jurisdiction over a person who acts directly or by
an agent, as to a cause of action arising from the person’s:
***
Causing tortious injury in this state to any person by an act outside this state
committed with the purpose of injuring persons, when he might reasonably have
expected that some person would be injured thereby in this state[.]
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Goodrich argues that Section 2307.382(A)(6) applies because it is seeking to prevent PolyOne
and Westlake Chemical from violating its privilege and confidentiality rights. It, therefore,
argues that its action “sounds in tort.”
{¶15} In its complaint, Goodrich sought injunctive relief to prevent the disclosure of
allegedly privileged documents. It did not assert a tort action. See R.C. 2307.011(J) (defining a
tort action as “a civil action for damages for injury, death, or loss to person or property.”); see
also Reynolds v. Akron-Canton Regional Airport Auth., 5th Dist. Stark No. 2008CA00143, 2009-
Ohio-567, ¶ 31 (distinguishing injunctive relief from actions based in tort). At its core, this is a
discovery dispute arising out of the arbitration proceeding pending in Kentucky. See Ward v.
Summa Health Sys., 128 Ohio St. 3d 212, 2010-Ohio-6275, ¶ 13 (classifying a dispute regarding
the discovery of allegedly privileged documents as a “discovery dispute”). While our standard
of review is de novo, we agree with the trial court and similarly “can think of no circumstance
under which th[e]se facts constitute tort[i]ous conduct” in this state. We, therefore, hold that
Section 2307.382(A)(6), which applies to “tortious injur[ies],” is inapplicable here. Accordingly,
we hold that the trial court properly granted Westlake Chemical’s motion to dismiss for lack of
personal jurisdiction. Goodrich’s first assignment of error is overruled.
ASSIGNMENT OF ERROR II
THE TRIAL COURT INCORRECTLY DISMISSED GOODRICH’S CLAIMS
BASED ON ALLEGED FAILURE TO JOIN AN INDISPENSABLE PARTY.
ASSIGNMENT OF ERROR III
THE TRIAL COURT INCORRECTLY DISMISSED GOODRICH’S CLAIM
AGAINST POLYONE.
{¶16} In its second assignment of error, Goodrich argues that the trial court erred by
dismissing its claims based upon its alleged failure to join an indispensable party. As previously
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noted, Westlake Chemical, as an alternative to its argument that the trial court lacked personal
jurisdiction, argued that the trial court should dismiss Goodrich’s claims because it failed to join
Westlake Vinyls. Goodrich argues, in part, that the trial court erred because its determination
that it lacked personal jurisdiction over the Arbitration Panel and Westlake Chemical divested it
of the authority to make further rulings.
{¶17} Personal jurisdiction is “[a] court’s power to bring a person into its adjudicative
process[.]” Renacci v. Evans, 9th Dist. Medina No. 09CA0004, 2009-Ohio-5154, ¶ 6, quoting
Black’s Law Dictionary 870 (8th Ed.2004). Absent personal jurisdiction, a judgment of a trial
court is void. State ex rel. DeWine v. 9150 Group, L.P., 9th Dist. Summit No. 25939, 2012-
Ohio-3339, ¶ 6.
{¶18} Because the trial court lacked personal jurisdiction over Westlake Chemical, we
hold that the trial court’s judgment with respect to Westlake Chemical’s failure-to-join-a-
necessary-party claim is void. Our ruling, however, does not affect the propriety of the trial
court’s dismissal of Westlake Chemical because, as discussed above, the trial court properly
dismissed it for lack of personal jurisdiction. Our analysis now turns to the related issue of
whether the trial court properly dismissed PolyOne.
{¶19} In its third assignment of error, Goodrich argues that the trial court erred by
dismissing its claims against PolyOne because PolyOne did not raise failure to join a necessary
party as an affirmative defense, nor did it move for dismissal. Although the trial court’s order is
unclear as to its basis for dismissing PolyOne, it presumably dismissed PolyOne in light of its
determination that Goodrich failed to join a necessary party, i.e., Westlake Vinyls, and that –
even if joined – the court would not have personal jurisdiction over Westlake Vinyls. Thus, the
trial court appears to have dismissed the entire action pursuant to Civil Rule 19(B). Given our
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determination that the trial court’s judgment with respect to Westlake Chemical’s failure-to-join-
a-necessary-party claim is void, we hold that the trial court erred by dismissing PolyOne on those
grounds.
{¶20} Goodrich’s second and third assignments of error are sustained.
ASSIGNMENT OF ERROR IV
THE TRIAL COURT INCORRECTLY ORDERED GOODRICH’S CLAIMS
DISMISSED WITH PREJUDICE.
{¶21} In its fourth assignment of error, Goodrich argues that the trial court erred by
dismissing the entire action “with prejudice.” In light of our holding that the trial court erred by
dismissing Goodrich’s claims based upon its alleged failure to join a necessary party, our
analysis will focus on the trial court’s dismissal of Westlake Chemical based upon lack of
personal jurisdiction.
{¶22} Civil Rule 41(B)(4)(a) provides that a dismissal for lack of personal jurisdiction
“shall operate as a failure otherwise than on the merits[.]” As this Court has stated, “a dismissal
which operates as a failure otherwise than on the merits is without prejudice, and the action may
be refiled.” MBNA America Bank, N.A. v. Berlin, 9th Dist. Medina No. 05CA0058-M, 2005-
Ohio-6318, ¶ 10. We, therefore, hold that the trial court erred by dismissing Goodrich’s claims
with prejudice. Accordingly, Goodrich’s fourth assignment of error is sustained.
III.
{¶23} Goodrich Corporation’s first assignment of error is overruled. Goodrich
Corporation’s second, third, and fourth assignments of error are sustained. The judgment of the
Summit County Court of Common Pleas is affirmed in part, and reversed in part, and this matter
is remanded for further proceedings consistent with this opinion.
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Judgment affirmed in part,
reversed in part,
and cause remanded.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed equally to both parties.
JENNIFER HENSAL
FOR THE COURT
WHITMORE, J.
MOORE, J.
CONCUR.
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APPEARANCES:
CLAIR E. DICKINSON and LUCAS M. BLOWER, Attorneys at Law, for Appellant.
PAUL K. STOCKMAN, BRANDEN P. MOORE, JAMES M. LYONS, JR., CAROL N. TRAN,
JOHN WEISENSELL, SAMUEL D. HINKLE IV, ADAM T. GOEBEL and DAVID A. SUPER,
Attorneys at Law, for Appellees.