Military Supply v. Reynosa Construction, Unpublished Decision (1-26-2000)
Military Supply v. Reynosa Construction, Unpublished Decision (1-26-2000)
Opinion of the Court
Military Supply is an Ohio corporation that supplies government contractors with building materials that are used in jobs for military bases and other government installations. Reynosa is a Texas-based government contractor, and Mid-Continent Casualty is an insurance company that had issued a performance and payment bond on work Reynosa contracted to complete at Dyess Air Force Base in Texas. Military Supply was to supply doors to Reynosa, which would in turn install the doors in two renovated dormitories on the Texas base. The doors were manufactured in Texas pursuant to an arrangement between Military Supply and a third company that is not a party to this proceeding.
During the project, dispute arose over the specifications of the doors, which resulted in an additional $13,483.54 cost above the contract price. Both companies blamed the other for the extra costs incurred and Reynosa balked at paying the additional money; Reynosa paid only the original contract price. Thereafter, on April 13, 1998, Military Supply filed a complaint for breach of contract against Reynosa and Mid-Continent Casualty. The complaint alleged that Reynosa had failed to pay for goods and materials and that Mid-Continent Casualty had failed to honor its performance and payment bond. In response, Reynosa and Mid-Continent Casualty filed a Civ.R. 12(B)(2) motion to dismiss for lack of personal jurisdiction on May 15, 1998. The trial court granted the motion on September 17, 1998, finding that:
Reynosa never travelled [sic] to Ohio, was not registered to do business in Ohio and the barracks were renovated in Texas.
The only intentional contact [Reynosa] had with the State of Ohio were the negotiations over the doors and windows to be supplied, telephone calls about the doors and windows, and mailing the check to [Military Supply]. Accordingly, this Court finds that it has no personal jurisdiction over [Reynosa] in this matter. [Military Supply] has failed to make even a prima facie showing of jurisdiction to withstand a motion to dismiss.
Military Supply timely appealed, asserting a single assignment of error:
THE TRIAL COURT ERRED AS A MATTER OF LAW IN DISMISSING APPELLANT MILITARY SUPPLY'S COMPLAINT AGAINST APPELLEE REYNOSA WHERE MILITARY SUPPLY HAD ESTABLISHED A PRIMA FACIE CASE OF PERSONAL JURISDICTION OVER THE APPELLEE.
In its sole assignment of error, Military Supply argues that Reynosa was subject to Ohio's long-arm statute and that, as a result, the trial court erred in granting the motion to dismiss for lack of personal jurisdiction.2 This Court disagrees.
The Supreme Court of Ohio has set forth a two-part test for determining when a state court has personal jurisdiction over a foreign corporation:
First, the court must determine whether the state's "long-arm" statute and applicable civil rule confer personal jurisdiction, and, if so, whether granting jurisdiction under the statute and the rule would deprive the defendant of the right to due process of law pursuant to the
Fourteenth Amendment to the United States Constitution.
U.S. Sprint Communications Co. Ltd. Partnership v. Mr. K's Foods,Inc. (1994),
R.C. 2307.38.2(A)(1) provides that a foreign corporation such as Reynosa "submits to the personal jurisdiction of an Ohio court if its activities lead to `[t]ransacting any business' in Ohio." (Alteration in original.) U.S. Sprint Communications Co. Ltd.Partnership, supra, at 185. Therefore, the threshold question in the instant case is whether Reynosa had sufficient minimum contacts with Ohio so that it could be said to have been transacting business in the forum state.
This Court has explained that, when deciding whether the long-arm statute applies, a court should consider three factors:
First, the defendant must purposely avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.
Krutowsky, supra, at 370, quoting Cincinnati Art Galleries v.Fatzie (1990),
The interaction between Military Supply and Reynosa began on March 28, 1996, when Military Supply sent Reynosa a general specification quotation for the doors and other items; two days prior to this, Military Supply had learned from a government contracting officer that Reynosa was one of the contractors on the list for the Dyess Air Force Base dormitory project. The quotation stated: "Prices shown are valid for sixty days." In response, Reynosa requested additional information and quotations, which Military Supply provided in a communication dated March 29, 1996. On April 25, 1996, Reynosa then sent Military Supply a purchase order for doors contained in the initial price quotation, well within the sixty-days contemplated by the March 28, 1996 quotation.
Drawing upon these facts, Military Supply argues to this Court that Hammill Mfg. Co. v. Quality Rubber Prod., Inc. (1992),
More persuasive is this Court's prior holding in Krutowsky. In Krutowsky, this Court found that personal jurisdiction did not exist because the defendant had not purposely availed himself of acting in Ohio. In reaching this conclusion, this Court found relevant that the Ohio-based plaintiff had initiated the contact, that the plaintiff had not learned of the defendant by any active advertisement on the part of the defendant, that the defendant did not reside in Ohio, and that the majority of the work had been performed outside of Ohio, among other additional factors.4
Such reasoning is applicable here. As noted, Military Supply initiated contact with Reynosa. The Texas company had not actively advertised with an intent to create a business relationship with an Ohio company, but instead had responded to Military Supply's business proposal. Although Military Supply argues that Reynosa had "revived" business relations after previously rejecting Military Supply's offer, the fact that the offer remained open for sixty days and that Reynosa reacted within that period is notable. Further, Reynosa was not based in Ohio, had no agents in Ohio, and owned no land in Ohio. The work that was performed on the doors never took place in Ohio and was not intended to establish an ongoing relationship between the parties. Rather, the contractual relationship of the parties consisted of a single business transaction.5 While Military Supply is correct in noting that there had been communication at various times between the parties regarding the door specifications and related matters,6 such communication by itself is insufficient to rise to the level of minimum contacts. SeeKrutowsky, supra, at 371, citing Friedman v. Speiser, Krause Madole, P.C. (1988),
Accordingly, this Court cannot say that the trial court erred in finding a lack of personal jurisdiction. The judgment of the Summit County Court of Common Pleas is therefore affirmed.
Judgment affirmed.
The Court finds that 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, 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(E).
Costs taxed to Appellant.
Exceptions.
DONNA J. CARR, FOR THE COURT.
WHITMORE, J., BATCHELDER, J., CONCUR.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.