Ed Map, Inc. v. Delta Career Edn. Corp. , 2020 Ohio 358 ( 2020 )

[Cite as Ed Map, Inc. v. Delta Career Edn. Corp., 2020-Ohio-358.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Ed Map, Inc., :
Plaintiff-Appellant, :
No. 18AP-712
v. : (C.P.C. No. 18CV-2305)
Delta Career Education Corporation et al., : (REGULAR CALENDAR)
Defendants-Appellees. :
D E C I S I O N
Rendered on February 4, 2020
On brief: Isaac Wiles Burkholder & Teetor, LLC, David M.
Whittaker, and Dale D. Cook, for appellant. Argued: Michael
L. Close.
On brief: Squire Patton Boggs (US) LLP, C. Craig Woods,
Andrew H. King, and Michael T. Mullaly, for appellees STVT-
AAI Education, Inc. and Ancora Intermediate Holdings, LLC.
Argued: Andrew H. King.
APPEAL from the Franklin County Court of Common Pleas
DORRIAN, J.
{¶ 1} Plaintiff-appellant, Ed Map, Inc. ("Ed Map"), appeals from a judgment of the
Franklin County Court of Common Pleas granting a motion to dismiss for lack of personal
jurisdiction filed by defendants-appellees STVT-AAI Education, Inc., doing business as
Ancora Education ("Ancora Education") and Ancora Intermediate Holdings, LLC ("Ancora
Holdings") (collectively, the "Ancora Defendants"). Because we conclude an evidentiary
hearing was necessary to determine whether the Ancora Defendants were subject to a
contractual forum selection clause providing for jurisdiction in Franklin County, we reverse
and remand for further proceedings.
No. 18AP-712 2
I. Facts and Procedural History
{¶ 2} Ed Map filed a complaint in the common pleas court against the Ancora
Defendants and defendants-appellees Delta Career Education Corporation ("Delta
Career"), Atlantic Coast Colleges, Inc., Berks Technical Institute, Inc., McCann Education
Centers, Inc., McCann School of Business and Technology, Inc., Miller-Motte Business
College, Inc., Palmetto Technical College, Inc., and Piedmont Business Colleges, Inc.
(collectively, the "Delta Defendants"). The complaint alleged that Ed Map entered into a
contract with Delta Career for educational books and services in February 2012 ("the
Bookstore Contract"). Ed Map claimed Delta Career was in breach of the Bookstore
Contract as of December 2017. The complaint further asserted that Ancora Holdings
acquired the Delta Defendants through an asset purchase agreement in January 2018 ("the
Purchase Agreement") and assumed certain liabilities and contracts of the Delta
Defendants, including the Bookstore Contract. The complaint claimed that Ancora
Holdings acknowledged, ratified, induced performance of, or benefited from the Bookstore
Contract. The complaint further stated that Ancora Holdings had assigned and transferred
the Bookstore Contract to Ancora Education. The complaint asserted claims for breach of
contract, fraud, failure to pay an account stated, promissory estoppel, and unjust
enrichment against Delta Career and the Ancora Defendants.
{¶ 3} The Ancora Defendants moved to dismiss for lack of personal jurisdiction,
asserting that both Ancora Education and Ancora Holdings were established under Texas
law and had their principal places of business in Texas. The Ancora Defendants asserted
that neither Ancora Education nor Ancora Holdings acquired the Bookstore Contract,
pursuant to the Purchase Agreement, and that none of the assets acquired by the Ancora
Defendants under the Purchase Agreement were located in or had significant connections
to Ohio. The Ancora Defendants claimed Ed Map failed to establish that personal
jurisdiction over them was proper under Ohio's long-arm statute or the principles of due
process.
{¶ 4} Ed Map filed a memorandum in opposition to the motion to dismiss,
asserting the common pleas court had jurisdiction over the Ancora Defendants based on a
forum selection clause contained in the Bookstore Contract, actions by the Ancora
Defendants constituting the transaction of business in Ohio, and actions by the Ancora
No. 18AP-712 3
Defendants that caused tortious injury to Ed Map in Ohio. The Ancora Defendants filed a
reply memorandum in support of their motion to dismiss and Ed Map filed a sur-reply in
opposition.
{¶ 5} On August 22, 2018, without conducting a hearing on the motion to dismiss,
the common pleas court granted the Ancora Defendants' motion, holding that the Ancora
Defendants did not acquire the Bookstore Contract under the Purchase Agreement and,
therefore, were not subject to the forum selection clause contained in the Bookstore
Contract. The court further concluded Ed Map failed to establish the Ancora Defendants
possessed minimum contacts with Ohio such that the court could exercise personal
jurisdiction over them. Ed Map moved for reconsideration, arguing the common pleas
court failed to construe the language of the Purchase Agreement in its favor. The common
pleas court denied Ed Map's motion for reconsideration, concluding that even when all
inferences were made in Ed Map's favor, the Purchase Agreement failed to establish that
the Ancora Defendants assumed the Bookstore Contract.
II. Assignments of Error
{¶ 6} Ed Map appeals and assigns the following three assignments of error for our
review:
[I.] The trial court erred in granting the Ancora defendants'
motion to dismiss for lack of personal jurisdiction.
[II.] The trial court improperly weighed the evidence and
applied an improper standard in construing the pleadings and
evidence in the deciding the motion to dismiss under Civil
Rule 12(B)(2).
[III.] The trial court erred in denying Map's motion for
reconsideration.
III. Analysis
A. Standard of Review
{¶ 7} Ed Map claims in its first assignment of error that the common pleas court
erred by granting the Ancora Defendants' motion to dismiss for lack of personal
jurisdiction. Personal jurisdiction is a question of law subject to de novo review. Simmons
v. Budde, 10th Dist. No. 14AP-846, 2015-Ohio-3780, ¶ 7. When a defendant files a motion
to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing
No. 18AP-712 4
that the trial court has personal jurisdiction over the defendant. Id. "If the court determines
a Civ.R. 12(B)(2) motion to dismiss without an evidentiary hearing, 'the plaintiff need only
establish a prima facie showing of personal jurisdiction, which requires sufficient evidence
to allow reasonable minds to conclude that the trial court has personal jurisdiction.' " Id.,quoting Austin Miller Am. Antiques, Inc. v. Cavallaro, 10th Dist. No. 11AP-400, 2011-Ohio-
6670, ¶ 7. The trial court must construe the allegations in the pleadings and the evidence in
the light most favorable to the plaintiff and make all reasonable inferences in the plaintiff's
favor when resolving a Civ.R. 12(B)(2) motion without conducting an evidentiary hearing.
Simmons at ¶ 7. See also Goldstein v. Christiansen, 70 Ohio St.3d 232, 236 (1994)
("Accordingly, [the trial judge] was required to view allegations in the pleadings and the
documentary evidence in a light most favorable to the plaintiffs, resolving all competing
inferences in their favor."). If a plaintiff produces sufficient evidence to allow reasonable
minds to conclude the trial court has personal jurisdiction over a defendant, "the trial court
could not dismiss the complaint without holding an evidentiary hearing." Benjamin v.
KPMG Barbados, 10th Dist. No. 03AP-1276, 2005-Ohio-1959, ¶ 27.
{¶ 8} It is undisputed that the Ancora Defendants were not established under Ohio
law and that neither of them has its principal place of business in Ohio. Thus, to establish
personal jurisdiction over the Ancora Defendants, Ed Map was required to show that the
Ancora Defendants consented to jurisdiction in Ohio or that the common pleas court could
exercise personal jurisdiction over them under Ohio law.
{¶ 9} Generally, a court must undertake a two-step analysis to determine whether
it has personal jurisdiction over a non-resident defendant. First, the court must consider
whether Ohio's long-arm statute and applicable civil rule confer personal jurisdiction over
the non-resident defendant. Second, if the statute and rule confer jurisdiction, the court
must consider whether exercising jurisdiction comports with the non-resident defendant's
rights under the Due Process Clause of the Fourteenth Amendment to the United States
Constitution. Goldstein at 235; Joffe v. Cable Tech, Inc., 163 Ohio App.3d 479, 2005-Ohio-
4930, ¶ 11 (10th Dist.). However, "the requirement that a court have personal jurisdiction
over a party is a waivable right and there are a variety of legal arrangements whereby
litigants may consent to the personal jurisdiction of a particular court system." Kennecorp
Mtge. Brokers, Inc. v. Country Club Convalescent Hosp. Inc., 66 Ohio St.3d 173, 175 (1993).
No. 18AP-712 5
"[I]n the light of present-day commercial realities, it has been stated that a forum selection
clause in a commercial contract should control, absent a strong showing that it should be
set aside." Id. Citing this court's decision in Ranco, Inc. of Delaware v. Gold Secs. Australia,
Ltd., 10th Dist. No. 90AP-114 (Jan. 31, 1991), Ed Map argues that acquisition of a contract
containing a forum selection clause imputes consent to jurisdiction to the successor. In
Ranco, this court reversed the trial court's order granting a motion to dismiss for lack of
personal jurisdiction and remanded for an evidentiary hearing, holding that "to the extent
that a successor in interest could assume the liabilities of its predecessor, jurisdiction over
the successor cannot necessarily be precluded merely because the successor was not an
original party to an agreement."
B. Consent to Personal Jurisdiction via Forum Selection Clause in Bookstore
Contract
{¶ 10} Ed Map first argues the Ancora Defendants consented to personal
jurisdiction in Ohio because the Bookstore Contract contained a forum selection clause
providing for jurisdiction in Ohio. Ed Map asserts the Ancora Defendants acquired the
Bookstore Contract and the incorporated forum selection clause under the Purchase
Agreement and, therefore, effectively consented to jurisdiction in Franklin County, Ohio,
for disputes arising from the Bookstore Contract.
1. Terms of the Bookstore Contract
{¶ 11} A copy of the Bookstore Contract was attached as an exhibit to Ed Map's
complaint. It contained a provision specifying that it was governed by the laws of Ohio and
that both parties consent to the jurisdiction of any federal or state court in Franklin County,
Ohio, for any disputes arising out of the Bookstore Contract. With respect to the duties of
Ed Map and Delta Career, the Bookstore Contract provided that Ed Map would purchase,
manage, and distribute textbooks on behalf of Delta Career, and provide access to certain
specified software. The Bookstore Contract designated Ed Map as the exclusive and official
distributor and provider of textbooks and related materials for certain Delta Career schools,
divisions, or campuses, to be set forth in a content fulfillment plan. The content fulfillment
plan, attached to the Bookstore Contract, stated that Ed Map would provide specified
course materials for Miller-Motte College Online and Miller-Motte Technical College
campuses in Roanoke, Virginia; Macon, Georgia; and Gulfport, Mississippi. The Bookstore
No. 18AP-712 6
Contract also incorporated a purchasing authorization form, authorizing Ed Map to
purchase all inventory, including textbooks and related materials, on behalf of Miller-Motte
College Online and Miller-Motte Technical College campuses in Roanoke, Virginia; Macon,
Georgia; and Gulfport, Mississippi. An amendment to the Bookstore Contract, dated
September 9, 2013, provided that the content fulfillment plan and the purchasing
authorization form would be deemed to cover all of Delta Career's schools, except Tucson
College and Creative Circus, Inc.
2. Terms of the Purchase Agreement
{¶ 12} A partially redacted copy of the Purchase Agreement was attached to Ed
Map's sur-reply in opposition to the motion to dismiss. The Purchase Agreement was
entered into between Ancora Holdings, the Delta Defendants, and Creative Circus. The
Purchase Agreement provided that Ancora Holdings would acquire assets relating to the
operation of the "business," which was defined as the business of owning and operating
certain specified schools. The list of schools, which was included in a schedule attached to
the Purchase Agreement, included campuses of Miller-Motte College located in Cary, North
Carolina; Fayetteville, North Carolina; Jacksonville, North Carolina; Raleigh, North
Carolina; and Wilmington, North Carolina, and campuses of Miller-Motte Technical
College located in Augusta, Georgia; Chattanooga, Tennessee; Columbus, Georgia; Conway,
South Carolina; Macon, Georgia; and Charleston, South Carolina. The Purchase Agreement
further provided that Ancora Holdings would acquire all "purchased contracts," which was
defined as contracts related to the business (i.e., contracts related to owning and operating
schools) that were not specifically excluded. Such excluded contracts were set forth in a
schedule to the Purchase Agreement, which stated that contracts related to the
administration or provision of any employee benefit plans were excluded. The Bookstore
Contract was not specifically set forth in the schedule of "excluded contracts."
3. Interaction of Purchase Agreement and Bookstore Contract
{¶ 13} Under the terms of the Purchase Agreement, the Ancora Defendants acquired
one school identified in the original content fulfillment plan and purchasing authorization
form under the Bookstore Contract (i.e., the Miller-Motte Technical College campus located
in Macon, Georgia). Moreover, the Bookstore Contract was amended in 2013 to include all
of Delta Career's schools within the content fulfillment plan and purchasing authorization
No. 18AP-712 7
form. Although the list of acquired schools under the Purchase Agreement does not clearly
designate which schools were operated by Delta Career, several of the schools acquired by
Ancora Holdings under the Purchase Agreement have names similar to the schools
designated as Delta Career entities under the Bookstore Contract. Thus, it is clear the
Ancora Defendants acquired at least one school covered under the Bookstore Contract and
they may have acquired more based on the amendment to the Bookstore Contract covering
all of Delta Career's schools. Because the Bookstore Contract related to the business of
owning and operating schools and was not designated as an excluded contract under the
Purchase Agreement, the Ancora Defendants acquired the Bookstore Contract with respect
to the Miller-Motte Technical College campus in Macon, Georgia, and any other Delta
Career schools covered by the 2013 amendment to the Bookstore Contract.
{¶ 14} The common pleas court concluded the Ancora Defendants did not acquire
any assets of Delta Career located in Ohio. The court also summarily concluded the Ancora
Defendants did not acquire the Bookstore Contract; however, the court does not appear to
have considered what Delta Career schools were within the scope of the Bookstore Contract
and whether any of those schools were acquired by the Ancora Defendants. As explained
above, at least one school acquired by the Ancora Defendants under the Purchase
Agreement was covered by the Bookstore Contract. Therefore, Ed Map established the
common pleas court had jurisdiction over the Ancora Defendants by virtue of the forum
selection clause contained in the Bookstore Contract for claims arising out of the Bookstore
Contract relating to the Miller-Motte Technical College campus located in Macon, Georgia,
and for any other Delta Career schools covered by the 2013 amendment to the Bookstore
Contract. Because the evidence before the court was unclear, it was necessary for the trial
court to conduct an evidentiary hearing to determine which of the schools acquired by the
Ancora Defendants were owned by Delta Career and covered by the Bookstore Contract.1
1 The Ancora Defendants assert they did not acquire any schools operated by Delta Career in Ohio and,
therefore, the business and contracts acquired under the Purchase Agreement do not relate to the operation
of any school in Ohio. While that may be relevant for determining whether the Ancora Defendants were subject
to personal jurisdiction under the long-arm statute, it does not resolve the question of whether they acquired
the Bookstore Contract pursuant to the Purchase Agreement.
No. 18AP-712 8
See Cincinnati Equine, LLC v. Sandringham Farm, LLC, 1st Dist. No. C-150067, 2016-
Ohio-803, ¶ 18 (finding that record contained contradictory evidence regarding whether
certain activities occurred in Ohio and concluding that remand was necessary because "the
trial court failed to conduct an evidentiary hearing and the trial court's jurisdiction is not
clear from the record"); Ranco (reversing and remanding for evidentiary hearing where
there were factual questions as to whether defendants were successors in interest to party
that entered into contract containing forum selection clause). See also CompuServe, Inc. v.
Trionfo, 91 Ohio App.3d 157, 162 (10th Dist.1993) (reversing denial of Civ.R. 60(B) motion
where there was a conflict in the pleadings as to whether defendant was subject to personal
jurisdiction and finding that trial court erred by failing to hold an evidentiary hearing to
resolve the conflict). On remand, the trial court should conduct an evidentiary hearing to
resolve this question and issue an judgment denying the Ancora Defendants' motion to
dismiss for lack of personal jurisdiction over any claims arising from the Bookstore
Contract relating to the Miller-Motte Technical College campus located in Macon, Georgia,
and any other schools owned by Delta Career that were covered by the Bookstore Contract
and acquired by the Ancora Defendants under the Purchase Agreement.
C. Minimum Contacts and Due Process
{¶ 15} The common pleas court also found the Ancora Defendants lacked minimum
contacts with Ohio sufficient to exercise personal jurisdiction over them. As explained
above, the Supreme Court of Ohio has held that the requirement of personal jurisdiction
under Ohio law is a waivable right and parties may consent to a jurisdiction through a forum
selection clause. Kennecorp at 175; Preferred Capital, Inc. v. Power Eng. Group, Inc., 112
Ohio St.3d 429, 2007-Ohio-257, ¶ 6. Where a valid and enforceable forum selection clause
exists, a trial court need not undertake the analysis of minimum contacts and due process
The Ancora Defendants also rely on Section 2.3 of the Purchase Agreement, which provides in relevant part
that they assumed all liabilities and obligations relating to each of the purchased contracts except those
liabilities and obligations arising from any breach or default of a purchased contract prior to the closing date
of the Purchase Agreement. That provision defines the scope of liabilities assumed under contracts purchased
through the Purchase Agreement, but it does not define the universe of purchased contracts. The fact that a
particular liability may not have been assumed under the Purchase Agreement because it was incurred prior
to the closing date of the Purchase Agreement does not resolve whether the contract under which that liability
arose was acquired in the Purchase Agreement. The Ancora Defendants' argument regarding Section 2.3 of
the Purchase Agreement would be more relevant to a determination of the merits of Ed Map's claims, such as
a motion for summary judgment, than a determination of whether they are subject to personal jurisdiction
under the forum selection clause of the Bookstore Contract.
No. 18AP-712 9
principles otherwise required to determine whether personal jurisdiction over a non-
resident defendant exists under Ohio law. See Automotive Illusions, LLC v. Reflex Ents.,
10th Dist. No. 01AP-1445, 2002-Ohio-4047, ¶ 15. See also Summitville Tiles, Inc. v. K-Tel
Corp., 7th Dist. No. 04 CO 41, 2005-Ohio-2786, ¶ 17 ("A forum selection clause acts as a
waiver of the minimum contacts test used to determine personal jurisdiction.");
Information Leasing Corp. v. King, 155 Ohio App.3d 201, 2003-Ohio-5672, ¶ 26 (1st Dist.),
("Since the forum-selection clause was valid, there is no need for us to conduct a minimum-
contacts analysis, as the parties have waived the due-process requirements of personal
jurisdiction."). Because we conclude an evidentiary hearing was necessary to determine
whether the Ancora Defendants were subject to the forum selection clause in the Bookstore
Contract, we need not reach the question of whether the trial court erred by concluding the
Ancora Defendants lacked minimum contacts to be subject to personal jurisdiction under
Ohio law.
{¶ 16} Accordingly, we sustain Ed Map's first assignment of error and remand for
an evidentiary hearing on the issue of whether the Ancora Defendants acquired the
Bookstore Contract under the Purchase Agreement.
D. Weighing of Evidence and Denial of Reconsideration
{¶ 17} Ed Map asserts in its second assignment of error the common pleas court
erred by improperly weighing the evidence and failing to construe all evidence in its favor.
In its third assignment of error, Ed Map argues the trial court erred in denying its motion
for reconsideration. Because we conclude the common pleas court erred by failing to
conduct an evidentiary hearing on the forum selection clause, and remand for that court to
conduct that hearing, Ed Map's second and third assignments of error are rendered moot.
IV. Conclusion
{¶ 18} For the foregoing reasons, we sustain Ed Map's first assignment of error,
which renders moot Ed Map's second and third assignments of error. We reverse the
judgment of the Franklin County Court of Common Pleas and remand this cause to that
court for further proceedings in accordance with law and consistent with this decision.
Judgment reversed; cause remanded.
SADLER, P.J., and KLATT, J., concur.