[Cite as Stewart v. Depth Constr., 2013-Ohio-3517.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
EMIL STEWART C.A. No. 26643
Appellant
v. APPEAL FROM JUDGMENT
ENTERED IN THE
DEPTH CONSTRUCTION, et al. AKRON MUNICIPAL COURT
COUNTY OF SUMMIT, OHIO
Appellees CASE No. 11 CVF 05396
DECISION AND JOURNAL ENTRY
Dated: August 14, 2013
CARR, Judge.
{¶1} Appellant Emil Stewart appeals the judgment of the Akron Municipal Court that
granted summary judgment in favor of Depth Construction. This Court reverses and remands.
I.
{¶2} On June 20, 2011, Mr. Stewart filed a complaint against Depth Construction,
alleging that the business had breached the terms of the contractor warranty with regard to work
performed by the company on Mr. Stewart’s property. “Depth Construction” filed an answer,
denying the allegations in the complaint and raising numerous affirmative defenses. “Depth
Construction” did not, however, raise the affirmative defense that Mr. Stewart was attempting to
sue a non-entity. In addition, the sole named defendant continued to defend itself in the name of
“Depth Construction.” For example, Depth Construction filed a Notice of Service of
Defendant’s First Set of Requests for Productions of Documents and Interrogatories to Plaintiff
Emil Stewart, and a Notice of Service of Defendant’s Responses to Plaintiff’s First Set of
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Interrogatories Propounded to the Defendant. In addition, Depth Construction filed a motion for
leave to file a third-party complaint. After the trial court granted leave, Depth Construction filed
a third-party complaint against Crano Excavating and P.R.A.C., seeking contribution and
indemnification by those two companies. Crano Excavating filed an answer, while P.R.A.C.
moved to dismiss pursuant to Civ.R. 12(B)(6). Depth Construction filed a brief in opposition to
P.R.A.C.’s motion to dismiss. The trial court denied P.R.A.C.’s motion to dismiss on the merits
and ordered that company to file an answer to Depth Construction’s third-party complaint within
fourteen days.
{¶3} After the case had pended before the trial court for just under a year, the
defendant, in the name of Robert Belknap dba Depth Construction, filed a motion for summary
judgment on Mr. Stewart’s complaint, for the first time arguing that Depth Construction was a
sole proprietorship without capacity to be sued and that Mr. Stewart’s claims were discharged as
a result of Mr. Belknap’s personal bankruptcy. The trial court initially ordered the motion for
summary judgment stricken from the record because it was filed without leave, but later granted
leave to the defendant to file the motion. Mr. Stewart filed a brief in opposition to the motion
and the defendant replied. The trial court granted the defendant’s motion for summary judgment
upon finding that Depth Construction was a sole proprietorship through Mr. Belknap and,
therefore, was not a legal entity that could be sued; and that Mr. Belknap’s bankruptcy
proceedings discharged any debt underlying Mr. Stewart’s lawsuit. In addition, the trial court
dismissed without prejudice Depth Construction’s third-party complaint against Crano
Excavating and P.R.A.C., not because Depth Construction was not a legal entity that had no
capacity to sue, but because it found that the third-party complaint was derivative of the outcome
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of Mr. Stewart’s complaint on which it had rendered judgment in favor of Mr. Belknap. Mr.
Stewart filed a timely appeal in which he raises one assignment of error for review.
II.
ASSIGNMENT OF ERROR
THE TRIAL COURT’S DECISION TO GRANT SUMMARY JUDGMENT IN
FAVOR OF THE APPELLEE DEPTH CONSTRUCTION CONSTITUTES
REVERS[I]BLE ERROR.
{¶4} Mr. Stewart argues that the trial court erred by granting summary judgment in
favor of Depth Construction.1 This Court agrees.
{¶5} This Court reviews an award of summary judgment de novo. Grafton v. Ohio
Edison Co., 77 Ohio St.3d 102, 105 (1996). This Court applies the same standard as the trial
court, viewing the facts in the case in the light most favorable to the non-moving party and
resolving any doubt in favor of the non-moving party. Viock v. Stowe-Woodward Co., 13 Ohio
App.3d 7, 12 (6th Dist.1983).
{¶6} Pursuant to Civ.R. 56(C), summary judgment is proper if:
(1) No genuine issue as to any material fact remains to be litigated; (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 viewing
such evidence most strongly in favor of the party against whom the motion for
summary judgment is made, that conclusion is adverse to that party.
Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327 (1977).
{¶7} To prevail on a motion for summary judgment, the party moving for summary
judgment must be able to point to evidentiary materials that show that there is no genuine issue
1
Although the trial court found that Depth Construction was not a legal entity against
whom judgment could be rendered, it apparently found no inconsistency in rendering judgment
in favor of the same entity as it wrote in its judgment entry that the motion was filed by “Depth
Construction.”
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as to any material fact, and that the moving party is entitled to judgment as a matter of law.
Dresher v. Burt, 75 Ohio St.3d 280, 293 (1996). Once a moving party satisfies its burden of
supporting its motion for summary judgment with sufficient and acceptable evidence pursuant to
Civ.R. 56(C), Civ.R. 56(E) provides that the non-moving party may not rest upon the mere
allegations or denials of the moving party’s pleadings. Rather, the non-moving party has a
reciprocal burden of responding by setting forth specific facts, demonstrating that a “genuine
triable issue” exists to be litigated for trial. State ex rel. Zimmerman v. Tompkins, 75 Ohio St.3d
447, 449 (1996).
{¶8} The non-moving party’s reciprocal burden does not arise until after the moving
party has met its initial evidentiary burden. To do so, the moving party must set forth evidence
of the limited types enumerated in Civ.R. 56(C), specifically, “the pleadings, depositions,
answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written
stipulations of fact[.]” Civ.R. 56(C) further provides that “[n]o evidence or stipulation may be
considered except as stated in this rule.”
{¶9} The trial court granted summary judgment in favor of the defendant upon finding
that Depth Construction was a sole proprietorship through Mr. Belknap and, therefore, not a
legal entity. Accordingly, it concluded that any judgment rendered against Depth Construction
would be void. The trial court relied on Patterson v. V&M Auto Body, 63 Ohio St.3d 573 (1992),
and Cobble v. Farmers’ Bank, 63 Ohio St. 528 (1900), to support its judgment. This Court
concludes that the trial court erred in its application of the law.
{¶10} As an initial matter, this Court disagrees that Mr. Belknap established that Depth
Construction was a sole proprietorship, a finding that served as the foundation of the trial court’s
judgment. The defendant appended Mr. Belknap’s affidavit to the motion for summary
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judgment. While Mr. Belknap averred that Depth Construction was an unincorporated business
for which he was the owner and operator, he did not expressly aver that the business was a sole
proprietorship. Nor does his statement mean that Depth Construction could only have been a
sole proprietorship. Businesses have “operators,” i.e., those who manage the business, as well as
persons who have an ownership interest in the business. Moreover, there are various business
entities, recognized as legal entities, which are unincorporated. See, e.g., R.C. 1705.01(D) and
R.C. 1782.01(C) (defining “entity” to include business, investment, and common law trusts;
limited liability companies; unincorporated business organizations, including general and limited
partnerships; and limited liability companies). Moreover, while Mr. Belknap appended a copy of
his voluntary petition for bankruptcy to his motion, he petitioned as an Individual Debtor and
listed only his personal name on the petition despite the fact that the petition asked for “All Other
Names used by the Debtor in the last 8 years” including “trade names.” None of the bankruptcy
documents attached to the motion made any reference to Depth Construction. Accordingly, this
Court concludes that the defendant failed to meet the initial burden under Dresher to establish
that Mr. Belknap and Depth Construction were one in the same.
{¶11} Even if Mr. Belknap had demonstrated that Depth Construction was a sole
proprietorship, however, the trial court erred concluding that Mr. Stewart could not sue Depth
Construction. R.C. 1329.01(B) and (D) allow a person to report any fictitious name or register
any trade name under which the person is operating a business with the secretary of state. R.C.
1329.10(B) precludes any person doing business under a trade name or fictitious name from
commencing or maintaining an action in the trade name or fictitious name unless the person has
first registered the trade name with or reported the fictitious name to the secretary of state. R.C.
1329.10(C) addresses actions against businesses operating under trade names or fictitious names
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and provides: “An action may be commenced or maintained against the user of a trade name or
fictitious name whether or not the name has been registered or reported in compliance with
section 1329.01 of the Revised Code.”
{¶12} The Ohio Supreme Court analyzed whether application of the statutory phrase
“the user of” the trade or fictitious name means that an action could be commenced or
maintained against a party named solely by its trade or fictitious name and held that it could.
Family Medicine Found., Inc. v. Bright, 96 Ohio St.3d 183, 2002-Ohio-4034. The Bright court
concluded that R.C. 1329.10(C) was ambiguous and so looked to the legislative purpose behind
the rule. The high court reasoned that, because the statute’s purpose is “to encourage the
registration and reporting of fictitious names with the state[,]” any interpretation concluding that
the statute prohibited suits against a party named only by a fictitious name would act as a
disincentive for persons to comply with the statutory registration and reporting requirements. Id.
at ¶ 10. Accordingly, the Ohio Supreme Court held that “R.C. 1329.10(C) permits a plaintiff to
bring suit against a party named only by its fictitious name.” Id. at ¶ 15; see also Martin v.
Bedroom Emporium, 9th Dist. Summit No. 18509, 1997 WL 803081 (Dec. 24, 1997).
{¶13} The Bright court distinguished its earlier decision in Patterson v. V&M Auto
Body, 63 Ohio St.3d 573 (1992), the case upon which the trial court relied in this matter. The
Bright court emphasized that its earlier holding that “a plaintiff may not maintain an action
against a defendant solely under a fictitious name” was only applicable under the limited
circumstances “where the plaintiff knows that the defendant does business as a sole proprietor.”
Bright at ¶ 12. In Patterson, the high court emphasized that the plaintiff was repeatedly put on
notice throughout the pendency of the case that the party he sued was a sole proprietorship, yet
the plaintiff failed to move to amend his complaint to name the person using that fictitious name.
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Patterson, 63 Ohio St.3d at 575-576. Moreover, the Patterson court emphasized that the person
using the fictitious name was aware of the lawsuit, had in fact appeared to vigorously defend,
and would not have suffered any prejudice had the plaintiff moved for and obtained leave to
amend his complaint to name the person using the fictitious name. Id. That is not the case here,
where (1) there was no indication in the contract upon which Mr. Stewart sued that Depth
Construction was a sole proprietorship, (2) Depth Construction filed an answer under the
fictitious name without raising an affirmative defense that it was not a legal entity that could be
sued, (3) Depth Construction participated in discovery under the fictitious name, (4) Depth
Construction filed a third-party complaint under the fictitious name, (5) Depth Construction
challenged a third-party defendant’s motion to dismiss for failure to state a claim under the
fictitious name, and (6) “Robert Belknap dba Depth Construction” did not appear in the case
until a year after the complaint was filed and only challenged Depth Construction’s capacity to
be sued in a motion for summary judgment.
{¶14} This Court further concludes that the trial court’s reliance on Cobble v. Farmers’
Bank, supra, was misplaced. That case involved a banking partnership that commenced an
action in its fictitious name, seeking to collect on a cognovit note. Based on provisions in a
statute that were substantially similar to R.C. 1329.10(B) rather than R.C. 1329.10(C), the Ohio
Supreme Court concluded that judgment in favor of the fictitious entity could not stand. 63 Ohio
St. at 540-541. Requiring registration or reporting of a fictitious name under which a person
does business before allowing the entity to commence a legal action against someone serves the
legislative purpose of encouraging registration or reporting. The converse, however, is not true.
As the Ohio Supreme Court recognized in Bright, requiring a person to register or report a
fictitious name under which he does business before another may sue the business under its
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fictitious name, i.e., the only name the plaintiff is likely to know, would encourage business
owners to avoid compliance with the statutory registration and reporting requirements. Bright at
¶ 10. Accordingly, as Cobble is substantially distinguishable on its face, the trial court’s reliance
on that case was misplaced.
{¶15} Based on this Court’s de novo review, we conclude that Depth Construction failed
to present any evidence to demonstrate that it was a sole proprietorship. Moreover, Depth
Construction failed to present any evidence that any business debts were discharged pursuant to
Mr. Belknap’s individual bankruptcy, particularly where the bankruptcy petition did not name
Depth Construction as a name or trade name used by Mr. Belknap during the prior eight years.
Even assuming, however, that Depth Construction was a sole proprietorship with no individual
identity, the trial court erred as a matter of law in determining that Mr. Stewart could not initiate
and maintain an action against Depth Construction in its fictitious or trade name. Mr. Belknap
did not present any evidence to indicate that Mr. Stewart knew or should have known that Depth
Construction was merely a fictitious name and that Mr. Belknap was the person using that name
for business. Furthermore, because the defendant failed to present evidence that Depth
Construction was a sole proprietorship and that Mr. Belknap was solely responsible for all
business debts, the trial court erred by concluding that Mr. Belknap’s individual bankruptcy
discharged any claims brought in this matter by Mr. Stewart against Depth Construction. Under
these circumstances, Depth Construction failed to meet its initial burden under Dresher to show
that no genuine issue of material fact existed and that it was entitled to judgment as a matter of
law. Accordingly, the trial court erred in granting summary judgment in favor of the defendant.
Mr. Stewart’s assignment of error is sustained.
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III.
{¶16} Mr. Stewart’s assignment of error is sustained. The judgment of the Akron
Municipal Court is reversed and the cause remanded for further proceedings consistent with this
opinion.
Judgment reversed,
and cause remanded.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Akron Municipal
Court, 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 to Appellee Depth Construction.
DONNA J. CARR
FOR THE COURT
MOORE, P. J.
WHITMORE, J.
CONCUR.
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APPEARANCES:
DANIEL S. WHITE, Attorney at Law, for Appellant.
MARK A. GREER, JAMIE A. PRICE and MARK D. THOMPSON, Attorneys at Law, for
Appellee.
R.S. HALEY, Attorney at Law, for Appellee.
E. MARK YOUNG, Attorney at Law, for Appellee.