Case Title: Cheap Escape Co., Inc. v. Haddox, L.L.C.

Citation: 2008-Ohio-6323

Docket Number: 20071870

State: ohio

Court: Ohio Supreme Court

Date: 2008-12-11T00:00:00Z

Document:
[Cite as Cheap Escape Co., Inc. v. Haddox, L.L.C., 120 Ohio St.3d 493, 2008-Ohio-6323.] 
 
 
CHEAP ESCAPE COMPANY, INC., D.B.A. JB DOLLAR STRETCHER,  
APPELLANT, v. HADDOX, L.L.C.; TESSMAN, APPELLEE. 
[Cite as Cheap Escape Co., Inc. v. Haddox, L.L.C.,  
120 Ohio St.3d 493, 2008-Ohio-6323.] 
Municipal courts — Jurisdiction — R.C. 1901.18(A) — Territorial limitation is 
jurisdictional. 
(No. 2007-1870 – Submitted October 7, 2008 – Decided December 11, 2008.) 
APPEAL from the Court of Appeals for Franklin County,  
No. 06AP-1107, 2007-Ohio-4410. 
__________________ 
SYLLABUS OF THE COURT 
R.C. 1901.18(A) limits municipal court subject-matter jurisdiction to actions or 
proceedings that have a territorial connection to the court. 
__________________ 
 
MOYER, C.J. 
I 
{¶ 1} This appeal requires us to determine whether municipal courts 
have subject-matter jurisdiction over matters lacking connections to their 
geographical territories.  For the following reasons, we hold that municipal courts 
do not have subject-matter jurisdiction over extraterritorial matters except in 
limited statutorily created circumstances.  We therefore affirm the holding of the 
court of appeals. 
II 
{¶ 2} Appellant, Cheap Escape Company, Inc., d.b.a. JB Dollar Stretcher 
(“Cheap Escape”), produces a magazine that features business advertisements.  
Haddox, L.L.C., a construction firm located in Summit County, entered into two 
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contracts with Cheap Escape to run ads in this magazine; appellee, Jeffrey L. 
Tessman, signed both agreements as a guarantor.  The contracts provided that “in 
the event either party is in noncompliance with any provision of this Agreement 
the proper venue for litigation purposes will be in the Franklin County Municipal 
Court or Franklin County Common Pleas.”  The parties agree that the events 
relevant to these transactions occurred outside Franklin County and that the only 
connection to that forum arises from the forum-selection clauses in the contracts 
between them. 
{¶ 3} After Haddox allegedly defaulted on the agreements, Cheap 
Escape filed a breach-of-contract action against Haddox and Tessman in the 
Franklin County Municipal Court, seeking $1,984 in damages.  Neither defendant 
filed a responsive pleading, and the municipal court eventually entered default 
judgment for Cheap Escape.  Nearly 11 months later, Tessman moved to vacate 
the default judgment, arguing that the municipal court lacked subject-matter 
jurisdiction because none of the relevant events occurred in Franklin County.1  
The municipal court denied this motion. 
{¶ 4} Tessman appealed.  The court of appeals determined that R.C. 
1901.18 limits municipal court subject-matter jurisdiction in civil matters to cases 
that have a territorial connection to the court.  173 Ohio App.3d 683, 2007-Ohio-
6185, 880 N.E.2d 122, ¶ 24–25.  Because the relevant actions in this case 
occurred in Summit County, not Franklin County, the court of appeals held that 
the municipal court did not have subject-matter jurisdiction over the case, 
regardless of the forum-selection clause.  Id. at ¶ 34.  The court of appeals 
therefore reversed the municipal court’s decision and remanded the case for 
                                                 
1.  Although the contracts included forum-selection clauses, such clauses do not affect a litigant’s 
ability to challenge subject-matter jurisdiction.  See Pratts v. Hurley, 102 Ohio St.3d 81, 2004-
Ohio-1980, 806 N.E.2d 992, ¶ 11, citing United States v. Cotton (2002), 535 U.S. 625, 630, 122 
S.Ct. 1781, 152 L.Ed.2d 860 (a challenge to subject-matter jurisdiction cannot be waived and may 
be asserted at any stage in the proceedings). 
 
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3 
dismissal.  Id. at ¶ 35.  We accepted Cheap Escape’s discretionary appeal.  116 
Ohio St.3d 1474, 2008-Ohio-153, 879 N.E.2d 782. 
III 
{¶ 5} This case requires us to examine the limits of municipal court 
jurisdiction.  Unfortunately, jurisdiction is a vague term, “ ‘a word of many, too 
many, meanings.’ ”  Steel Co. v. Citizens for a Better Environment (1998), 523 
U.S. 83, 90, 118 S.Ct. 1003, 140 L.Ed.2d 210, quoting United States v. Vanness 
(C.A.D.C.1996), 85 F.3d 661, 663, fn. 2.  Several distinct concepts, including 
territorial jurisdiction, monetary jurisdiction, personal jurisdiction, and subject-
matter jurisdiction, must be demonstrated for a municipal court to be able to hear 
a specific case. 
{¶ 6} While the parties agree that the Franklin County Municipal Court 
had territorial jurisdiction, monetary jurisdiction, and personal jurisdiction in this 
case,2 they disagree sharply on the issue of municipal court subject-matter 
jurisdiction.  “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.”  Morrison v. Steiner (1972), 32 
Ohio St.2d 86, 87, 61 O.O.2d 335, 290 N.E.2d 841. 
{¶ 7} Unlike courts of common pleas, which are created by the Ohio 
Constitution and have statewide subject-matter jurisdiction, see Section 4(A) and 
(B), Article IV, Ohio Constitution, municipal courts are statutorily created, R.C. 
1901.01, and their subject-matter jurisdiction is set by statute.  R.C. 1901.18(A) 
                                                 
2.  Territorial jurisdiction refers to the ability of a court to act as a court of record in a specific 
area.  See R.C. 1901.02.  The Franklin County Municipal Court had territorial jurisdiction over the 
case because it was sitting in Columbus, as required by R.C. 1901.02(A).  Likewise, the municipal 
court had monetary jurisdiction over the case because the amount in dispute is $1,984, less than 
the $15,000 monetary limit that R.C. 1901.17 sets for cases such as the one at bar.  Finally, the 
municipal court had personal jurisdiction, given the forum-selection clauses in the contracts.  See 
Kennecorp Mtge. Brokers, Inc., v. Country Club Convalescent Hosp., Inc. (1993), 66 Ohio St.3d 
173, 175, 610 N.E.2d 987 (forum-selection clauses in commercial contracts are valid in the 
absence of fraud or overreaching and can be used to establish personal jurisdiction). 
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provides the applicable law in this regard: “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 * * *.”  The list of enumerated actions includes 
breach-of-contract cases, which is the cause of action here.  Id. at (A)(3). 
{¶ 8} To resolve this case, we must specifically determine what the 
phrase “original jurisdiction within its territory” means.  Appellant interprets the 
phrase to mean that a municipal court has subject-matter jurisdiction over any 
statutorily prescribed action, regardless of where the underlying events occurred.  
Conversely, appellee argues that the phrase limits subject-matter jurisdiction to 
those actions with a territorial connection to the court (e.g., the relevant events 
occurred within the territorial limits of the court).  For the following reasons, we 
adopt appellee’s view. 
{¶ 9} When interpreting a statute, we first look to the plain language of 
the statute and apply it as written when its meaning is clear and unambiguous.  
State v. Lowe, 112 Ohio St.3d 507, 2007-Ohio-606, 861 N.E.2d 512, ¶ 9.  
Unfortunately, the phrase “original jurisdiction within its territory” is not a model 
of clarity. 
{¶ 10} 
Appellant argues that the words “within its territory” refer to 
“jurisdiction” and not the various types of actions listed in R.C. 1901.18(A)(1) 
through (12).  Under this reading, R.C. 1901.18(A) grants a municipal court 
subject-matter jurisdiction to hear one of those actions if the court convenes 
within its geographical territory, regardless of whether the case has a territorial 
connection to the forum.  Thus, appellant claims that the Franklin County 
Municipal Court had jurisdiction over this case because it was operating in 
Columbus, as required by R.C. 1901.02(A), even though the relevant events 
occurred in Summit County.  Appellant refers to our decision in Morrison to 
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5 
support this conclusion.  See Morrison, 32 Ohio St.2d at 88, 61 O.O.2d 335, 290 
N.E.2d 841 (noting that “every municipal court in the state would have subject-
matter jurisdiction” over a breach-of-contract action for less than the jurisdictional 
monetary limit). 
{¶ 11} 
Appellee argues that this approach renders the phrase “within its 
territory” irrelevant and that R.C. 1901.18 should instead be read to give 
municipal courts subject-matter jurisdiction only over events having a territorial 
connection to the court.  This interpretation requires us to read “within its 
territory” as referring to the types of actions that a municipal court may hear.  
Appellee further claims that Morrison was primarily concerned with issues of 
venue and that the brief explanation of subject-matter jurisdiction in that case 
should not be dispositive in this case, because the appellant there did not 
challenge the court’s subject-matter jurisdiction. 
{¶ 12} 
After reviewing these arguments and the plain text of R.C. 
1901.18(A), we find the statute to be ambiguous; the words “within its territory” 
could refer to either “original jurisdiction” or the list of actions in the statutory 
subsections.  It is simply unclear from the statutory language whether the General 
Assembly intended to limit municipal court subject-matter jurisdiction to 
territorial matters or to give municipal courts subject-matter jurisdiction over all 
matters suitable for municipal court review so long as the court sits within its 
territory when it disposes of a dispute.  Both interpretations are reasonable.  Our 
decision in Morrison, which was primarily focused on issues of venue, lends little 
assistance in this regard.  At most, Morrison offers further support for the fact that 
R.C. 1901.18 establishes municipal court subject-matter jurisdiction; it does not 
provide meaning to the terms used therein.  See Morrison, 32 Ohio St.2d at 88, 61 
O.O.2d 335, 290 N.E.2d 841. 
{¶ 13} 
To resolve this ambiguity, we must rely on additional methods of 
statutory interpretation.  Because R.C. 1901.18 is part of a complex series of 
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statutes related to jurisdiction, it is appropriate to review the statutes in pari 
materia.  See State ex rel. Herman v. Klopfleisch (1995), 72 Ohio St.3d 581, 585, 
651 N.E.2d 995 (allowing in pari materia review to deduce meaning when a 
statute is facially ambiguous).  Under this canon of construction, we read all 
statutes relating to the same general subject matter together and interpret them in 
a reasonable manner that “give[s] proper force and effect to each and all of the 
statutes.”  Id., citing United Tel. Co. of Ohio v. Limbach (1994), 71 Ohio St.3d 
369, 372, 643 N.E.2d 1129. 
{¶ 14} 
Reading R.C. 1901.18 in pari materia with related statutes 
clarifies its meaning.  As noted above, appellant argues that “within its territory” 
means that a municipal court may hear any of the actions enumerated in R.C. 
1901.18(A)(1) through (12) so long as it sits within its geographical territory.  
However, R.C. 1901.02 establishes municipal court territorial jurisdiction, 
providing that municipal courts “have jurisdiction within the corporate limits of 
their respective municipal corporations,” and establishes where each court must 
sit within a specific county.  See also R.C. 1901.021(A) (allowing a municipal 
court to sit outside the limits of a specific municipal corporation if it has territorial 
jurisdiction over a broader area). 
{¶ 15} 
Thus, appellant’s interpretation would make the phrase “within 
its territory” in R.C. 1901.18 mere surplusage that duplicates R.C. 1901.02 and 
1901.021, albeit in more general terminology.  If the General Assembly had 
intended to merely repeat the provisions of these statutes, it could have 
incorporated them by reference in R.C. 1901.18(A), as it did with R.C. 1901.17 
and 1901.181, e.g., “when properly convened according to the territorial rules set 
forth in R.C. 1901.02 and 1901.021, a municipal court has original jurisdiction * * 
*.” 
{¶ 16} 
However, the General Assembly chose to use the unique phrase 
“original jurisdiction within its territory” in R.C. 1901.18, and we must afford 
January Term, 2008 
7 
those words some meaning.  “It is axiomatic in statutory construction that words 
are not inserted into an act without some purpose.”  State ex rel. Carmean v. 
Hardin Cty. Bd. of Edn. (1960), 170 Ohio St. 415, 422, 11 O.O.2d 162, 165 
N.E.2d 918; see also State ex rel. Bohan v. Indus. Comm. (1946), 147 Ohio St. 
249, 251, 34 O.O. 151, 70 N.E.2d 888 (courts must “accord meaning to each word 
of a leglislative [sic] enactment if it is reasonably possible so to do”).  Because 
“within its territory” does not refer to the areas in which a municipal court may 
sit, the only other logical way to read the phrase is as a limit on the types of 
actions that a court may hear.  Thus, 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. 
{¶ 17} 
This reading makes sense in view of other related subsections.  
R.C. 1901.19(B) provides that “a municipal court * * * has jurisdiction outside its 
territory in a proceeding in aid of execution to subject to the payment of the 
judgment the interest in personal property of a judgment debtor under a judgment 
rendered by the court * * *.”  If municipal courts had statewide jurisdiction as 
appellant suggests, this subsection, granting extraterritorial jurisdiction for a 
specific, limited purpose, would be unnecessary. 
{¶ 18} 
Likewise, R.C. 1901.20 provides that municipal courts have 
subject-matter jurisdiction in criminal matters only when the crime was 
committed “within its territory” or “within the limits of its territory.”  R.C. 
1901.20(A)(1) and (B).  We find no reason that the General Assembly would have 
granted municipal courts statewide subject-matter jurisdiction over civil matters 
but only territorial subject-matter jurisdiction over criminal matters.  Further, the 
fact that the General Assembly used the words “within its territory” in both 
sections suggests that the phrase should carry the same meaning in both. 
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{¶ 19} 
Appellant tries to avoid these comparisons by pointing to former 
R.C. 1901.19(A)(4).  Before it was removed from the statute on July 1, 1997, this 
subsection provided: “[A] municipal court ha[s] jurisdiction within its territory * 
* * [i]n any civil action or proceeding at law in which the subject matter of the 
action or proceeding is located within the territory or when the defendant or any 
of the defendants resides or is served with summons within the territory.”  Former 
R.C. 1901.19(A)(4), eliminated by Am.Sub.H.B. No. 438, eff. July 1, 1997, 146 
Ohio Laws, Part III, 4841–4842.  Several courts of appeals found that this 
provision limited municipal court subject-matter jurisdiction to territorial matters.  
See, e.g., Stern v. Cleveland Browns Football Club, Inc. (Dec. 20, 1996), Lake 
App. No. 95-L-196, 1996 WL 761163; Rose v. Mays (Nov. 1, 1995), Montgomery 
App. No. CA15084, 1995 WL 643123.  Appellant argues that by removing this 
provision in 1997, the General Assembly intended to remove the territorial 
restrictions therein and give municipal courts statewide jurisdiction. 
{¶ 20} 
We are not persuaded by appellant’s argument.  While former 
R.C. 1901.19(A)(4) expressly limited municipal court subject-matter jurisdiction, 
its removal does not suggest an intent to expand that jurisdiction.  In fact, the 
removal appears to be little more than legislative housekeeping.  R.C. 1901.19 
was, and still is, concerned primarily with ancillary jurisdictional powers, in 
particular the power of a court to compel the attendance of witnesses, issue 
executions on its judgments, and perform similar tasks.  See former R.C. 
1901.19(A)(1) through (3) and (5) through (7); current R.C. 1901.19(A)(1) 
through (6).  Thus, the discussion of matters pertaining to municipal court subject-
matter jurisdiction in former R.C. 1901.19(A)(4) was simply out of place, 
especially since we recognized in Morrison that “[s]ubject-matter jurisdiction of 
Ohio municipal courts is created and defined by R.C. 1901.18.”  Morrison, 32 
Ohio St.2d at 87–88, 61 O.O.2d 335, 290 N.E.2d 841. 
January Term, 2008 
9 
{¶ 21} 
Given this fact, we decline to read anything into the deletion of 
former R.C. 1901.19(A)(4).  The removal of this out-of-place section does not, on 
its own, clarify the ambiguity in the present version of R.C. 1901.18, nor does it 
invalidate the conclusion arising from an in pari materia review of the statutes in 
R.C. Chapter 1901. 
{¶ 22} 
We therefore hold 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 this matter.  Although the parties entered into contracts with 
what appear to be valid forum-selection clauses, such clauses may be used only to 
choose from among venues that have subject-matter jurisdiction; litigants cannot 
vest a court with subject-matter jurisdiction by agreement.  See Fox v. Eaton 
Corp. (1976), 48 Ohio St.2d 236, 238, 2 O.O.3d 408, 358 N.E.2d 536, overruled 
on other grounds, Manning v. Ohio State Library Bd. (1991), 62 Ohio St.3d 24, 
29, 577 N.E.2d 650. 
IV 
{¶ 23} 
For the foregoing reasons, we affirm the holding of the court of 
appeals. 
Judgment affirmed. 
PFEIFER, LUNDBERG STRATTON, O’CONNOR, O'DONNELL, LANZINGER, and 
CUPP, JJ., concur. 
__________________ 
Gallagher Sharp, Timothy J. Fitzgerald, and Colleen A. Mountcastle, for 
appellant. 
James R. Douglass Co., L.P.A., and James R. Douglass, for appellee. 
______________________