Court Opinion

ID: 4384980
Source: CourtListenerOpinion
Date Created: 2019-04-08 16:39:24.068658+00
Date Added: 2024-06-11T14:22:55.223373
License: Public Domain

[Cite as Calvary Industries, Inc. v. Coral Chem. Co., 2019-Ohio-1288.]

                                     IN THE COURT OF APPEALS

                            TWELFTH APPELLATE DISTRICT OF OHIO

                                             BUTLER COUNTY

CALVARY INDUSTRIES, INC.,                                :

        Appellant,                                      :           CASE NO. CA2018-07-134

                                                        :                OPINION
    - vs -                                                                4/8/2019
                                                        :

CORAL CHEMICAL COMPANY,                                  :

        Appellee.                                       :

          CIVIL APPEAL FROM BUTLER COUNTY COURT OF COMMON PLEAS
                            Case No. CV2016-02-0395

Burke Law Office, LLC, Travis E. Burke, 12261 Gaines Way, Walton, Kentucky 41094, for
appellant

Garvey Shearer Nordstrom, John J. Garvey III, 2400 Chamber Center Drive, Suite 210, Fort
Mitchell, Kentucky 41017, for appellee

        HENDRICKSON, P.J.

        {¶ 1} Appellant, Calvary Industries, Inc., appeals a decision of the Butler County

Court of Common Pleas granting a motion to dismiss in favor of appellee, Coral Chemical

Company. For the reasons set forth below, we affirm the trial court's decision.

        {¶ 2} The facts pertinent to the present appeal were previously set forth in Calvary

Industries v. Coral Chem. Co., 12th Dist. Butler No. CA2016-12-233, 2017-Ohio-7279, ¶ 2-8,

and are as follows:
                                                         Butler CA2018-07-134

Coral Chemical Company is a corporation with citizenship in
Illinois. Coral employed Rashmi Patel, who is also a citizen of
Illinois. After 24 years of employment, Coral hired Patel as an
independent contractor. The independent contractor agreement
included a fixed termination date. When Patel and Coral could
not reach an agreement to continue Patel's independent
contractor status, their relationship terminated.

Approximately a month later, Calvary, an Ohio Corporation, hired
Patel as an independent contractor. Calvary instructed Patel that
he was not to utilize, share, or communicate any confidential,
proprietary, or trade secrets he learned while working with Coral.

Coral later filed a complaint against Patel in a Lake County,
Illinois, court alleging breach of the employment agreement and
independent contractor agreement between itself and Patel
("Lake County Case"). Coral alleged that Patel breached the
restrictive covenants prohibiting him from working for Coral's
direct competitors, including Calvary.

Within the Lake County Case complaint, Coral named Calvary as
a respondent in discovery. This designation gave Coral the
opportunity to conduct discovery to determine whether Calvary
should be named a defendant in the case. After a year of
disputed proceedings in which Calvary challenged the Illinois
Court's personal jurisdiction over it, the Illinois Court dismissed
Calvary from the Lake County Case for lack of personal
jurisdiction.

Prior to Calvary being dismissed from the Lake County Case,
Calvary had initiated the current action for declaratory judgment
against Coral in the Butler County Court of Common Pleas,
seeking a declaration that (1) Calvary was legally permitted to
employ Patel as an independent contractor; (2) Calvary did not
commit any tortious conduct arising from, or in connection with,
the employment of Patel as an independent contractor; (3)
Calvary's employment of Coral's former employees did not
violate noncompete and confidentiality agreements Coral had
with its employees; (4) Calvary's conduct associated with Patel's
employment did not cause any violation of the employment and
independent contractor agreements between Patel and Coral;
and (5) Calvary had not received, benefited from, or utilized any
of Coral's confidential, proprietary, or trade secret information.

Coral filed a motion to dismiss or stay the proceedings, and
argued that the issues raised in Calvary's declaratory judgment
action were already pending before the Illinois Court through the
Lake County Case. Calvary had not been dismissed from the
Lake County Case as of this time. The trial court scheduled a

                                -2-
                                                                         Butler CA2018-07-134

              conference with the parties on October 20, 2016. However, on
              October 19, 2016, the trial court canceled the status conference
              and granted Coral's motion to dismiss. Unbeknownst to the trial
              court, on September 12, 2016, Calvary had been dismissed from
              the Lake County Case. The trial court cited forum non
              conveniens as the reason for its dismissal.

              Calvary thereafter filed a motion to reinstate the declaratory
              judgment action wherein it explained that the Illinois court
              dismissed it from the Lake County Case for lack of personal
              jurisdiction. The trial court denied Calvary's motion to reinstate,
              stating that it found the motion "not in proper order." Calvary * * *
              appeal[ed] the trial court's order * * *.

       {¶ 3} On appeal, we reversed the trial court's decision granting Coral's motion to

dismiss, noting that the trial court "never took into consideration whether the declaratory

judgment [action] was valid at its inception and did not address the rules of law * * * regarding

when declaratory judgment actions are proper or when they require dismissal." Id. at ¶ 15.

We further found that we were unable to review the trial court's decision to dismiss the action

on the basis of forum non conveniens as the trial court had failed to "address the doctrine * *

* specific to weighing the balancing factors and the options available while a case was

pending in another court." Id. at ¶ 20. We therefore reversed the trial courts' decision and

remanded the case with instructions for the trial court to "offer an analysis of Calvary's

request for declaratory judgment, including whether such is appropriate and whether

dismissal for forum non conveniens reasons is appropriate given the dismissal of Calvary

from the Lake County Case." Id. at ¶ 21 and 25.

       {¶ 4} After the matter was remanded, Coral filed a renewed motion to dismiss or stay

proceedings, arguing the declaratory judgment action was not valid as Calvary failed to name

Patel as a necessary and indispensable party in the action and there was not a justiciable

issue or actual controversy between the parties. Coral further argued dismissal of the action

pursuant to forum non conveniens was proper. Calvary filed a memorandum in opposition to

the renewed motion. In their respective filings, the parties notified the trial court that Coral
                                               -3-
                                                                                   Butler CA2018-07-134

had been permitted to file an amended complaint in the Lake County Case to name Calvary

as a party to the action.1 Calvary had filed a motion disputing the Illinois court's jurisdiction

over it, and that motion remained pending at the time the trial court considered the merits of

Coral's renewed motion to dismiss or stay proceedings in the Ohio action.

        {¶ 5} On June 25, 2018, the trial court entered a decision dismissing Calvary's

declaratory judgment action without prejudice. The trial court found there was no justiciable

issue before it as Calvary was improperly seeking to have the court render an advisory

opinion as to whether it could, in the future, hire former employees of Coral. The court

further noted that "Patel is no longer employed by [Calvary], no action is pending against

[Calvary] in Ohio for any improper actions with regard to its employ of Patel, and * * * [Calvary

is] seek[ing] to have th[e] Court * * * make declarations regarding an Illinois contract to which

[Calvary] is not even a party." The court then found that even if a justiciable issue did exist,

dismissal of the action pursuant to forum non conveniens was proper. In reaching this

determination, the court considered the facts of the case and balanced the private interests

of the litigants and the public interests of the courts and citizens of the forum states.

        {¶ 6} Calvary appealed the trial court's dismissal of its complaint, raising two

assignments of error for our consideration.

        {¶ 7} Assignment of Error No. 1:

        {¶ 8} THE TRIAL COURT ERRED IN DISMISSING APPELLANT'S COMPLAINT ON

THE BASIS OF NON-COMPLIANCE WITH THE DECLARATORY JUDGMENT ACT.

        {¶ 9} In its first assignment of error, Calvary argues the trial court erred in dismissing

its complaint as the complaint set forth a justiciable controversy and complied with the

1. From the parties' representations and the record, it appears that Coral's second amended complaint naming
Calvary as a party in the Lake County Case was dismissed by that court. Coral was given leave to refile a third
amended complaint naming Calvary as a party to the action. The third amended complaint remained before the
Lake County Court at the time the Ohio court decided Coral's renewed motion to stay or dismiss the declaratory
judgment action.
                                                     -4-
                                                                      Butler CA2018-07-134

Declaratory Judgment Act.

       {¶ 10} "A declaratory judgment action provides a means by which parties can

eliminate uncertainty regarding their legal rights and obligations." Mid-American Fire & Cas.

Co. v. Heasley, 113 Ohio St. 3d 133, 2007-Ohio-1248, ¶ 8, citing Travelers Indemn. Co. v.

Cochrane, 155 Ohio St. 305, 312 (1951). In R.C. Chapter 2721, the General Assembly

provided that any person interested under a written contract, or other writing constituting a

contract, may bring a declaratory judgment action to have a court determine any question of

construction or rights arising under the contract, "either before or after there has been a

breach of the contract." Waldman v. Pitcher, 1st Dist. Hamilton Nos. C-150462 and C-

150501, 2016-Ohio-5909, ¶ 19, citing R.C. 2721.03 and 2721.04.

       {¶ 11} The Declaratory Judgment Act does not authorize a court to render an advisory

opinion. Rather, a declaratory-judgment action may be filed only for the purpose of deciding

an "actual controversy, the resolution of which will confer certain rights or status upon the

litigants." Mid-American at ¶ 9. A declaratory judgment action is proper if "(1) the action is

within the scope of the Declaratory Judgment Act, (2) a justiciable controversy exists between

adverse parties, and (3) speedy relief is necessary to preserve rights that may otherwise be

impaired or lost." Calvary, 2017-Ohio-7279 at ¶ 14, citing Freedom Rd. Found. v. Ohio Dept.

of Liquor Control, 80 Ohio St. 3d 202 (1997). Generally, there are only two reasons for

dismissing a complaint for declaratory judgment: "(1) there is no real controversy or

justiciable issue between the parties, and (2) the declaratory judgment will not terminate the

uncertainty." Burchwell v. Warren Cty., 12th Dist. Warren No. CA2013-09-079, 2014-Ohio-

1892, ¶ 9.

       {¶ 12} An appellate court reviews the dismissal of a declaratory judgment action on

the basis of justiciability under an abuse-of-discretion standard of review. Arnott v. Arnott,

132 Ohio St. 3d 401, 2012-Ohio-3208, ¶ 13. See also Mid-American, 2007-Ohio-1248 at
                                             -5-
                                                                           Butler CA2018-07-134

paragraph two of the syllabus. An abuse of discretion constitutes more than an error of law

or judgment; it requires a finding that the trial court acted arbitrarily, unreasonably, or

unconscionably. Lauver v. Ohio Valley Selective Harvesting, LLC, 12th Dist. Clermont No.

CA2016-11-076, 2017-Ohio-5777, ¶ 16.

       {¶ 13} After a review of the record, we find that the trial court did not abuse its

discretion in granting Coral's motion to dismiss. Contrary to Calvary's arguments, Calvary's

complaint sought an advisory opinion as to whether its employment of Coral's "former

employees * * * violate[s] the non-compete and confidentiality agreements [Coral] has with its

employees." With the exception of Patel, these "former employees" and the contract

provisions allegedly at issue were not identified in the complaint. There is no indication that a

real controversy exists with respect to these unidentified former employees and their

unspecified contract provisions.

       {¶ 14} As for Calvary's remaining declaratory judgment claims that it had the right to

employ Patel, that there was no tortious conduct arising from its employment of Patel, that its

conduct in employing Patel did not violate the employment and independent contractor

agreements between Patel and Coral, and that Calvary had not received, benefited from, or

utilized Coral's confidential, proprietary, or trade secret information, we find that the trial court

did not abuse its discretion in granting Coral's motion to dismiss. Calvary's complaint does

not set forth allegations indicating that speedy relief is necessary to preserve rights that may

otherwise be impaired or lost.

       {¶ 15} Furthermore, as this court has previously recognized, a declaratory judgment

action is not appropriate where "'a resolution of the controversy depends greatly upon a

determination of the facts of the case.'" Keegan v. Sneed, 12th Dist. Butler No. CA2000-02-

029, 2000 Ohio App. LEXIS 4807, *8 (Oct. 16, 2000), quoting Therapy Partners of America v.

Health Providers, Inc., 129 Ohio App. 3d 572, 578 (10th Dist.1998). This is especially true
                                                -6-
                                                                       Butler CA2018-07-134

when the same facts are at issue in a pending action in another jurisdiction. Therapy

Partners of America at 578-579. "Resolution of disputed facts in a declaratory judgment

action is particularly inappropriate where the disputed facts are at issue in a pending action."

Peat Marwick Main & Co. v. Elliot, 10th Dist. Franklin No. 90AP-921, 1991 Ohio App. LEXIS

101, *7 (Jan. 10, 1991), citing Videtto v. Marsh, 112 Ohio App. 151, 153 (3d Dist.1960).

Accordingly, as the factual questions that Calvary sought to have decided in its complaint for

declaratory judgment are pending in an action between the same parties in the Lake County

Case, we find that the trial court did not abuse its discretion in granting Coral's motion to

dismiss. See Walther v. Walther, 102 Ohio App. 3d 378, 381 (1st Dist.1995). Calvary's first

assignment of error is, therefore, overruled.

       {¶ 16} Assignment of Error No. 2:

       {¶ 17} THE TRIAL COURT ERRED BY DISMISSING APPELLANT'S COMPLAINT ON

THE BASIS OF FORUM NON CONVENIENS.

       {¶ 18} In its second assignment of error, Calvary contends the trial court erred when it

dismissed its complaint on the basis of forum non conveniens. We disagree and find that the

doctrine of forum non conveniens was also an appropriate basis for dismissal of Calvary's

complaint.

       {¶ 19} "'A court faced with the situation of a prior case pending in another state now

has three options: (1) it can grant a stay in the Ohio proceedings pending the resolution of

the earlier action outside of Ohio, (2) it can go forward with the action in Ohio, or (3) it can

dismiss the case under the doctrine of forum non conveniens.'" In re Estate of Rush, 12th

Dist. Warren No. CA2013-10-103, 2014-Ohio-3293, ¶ 34, quoting Walp v. Walp, 3d Dist.

Auglaize No. 2-05-10, 2005-Ohio-4181, ¶ 11. Under the doctrine of forum non conveniens, a

court is permitted to dismiss an action to "further the ends of justice and to promote the

convenience of the parties, even though jurisdiction and venue are proper in the court
                                                -7-
                                                                             Butler CA2018-07-134

chosen by the plaintiff." Calvary, 2017-Ohio-7279 at ¶ 16, citing Chambers v. Merrell-Dow

Pharmaceuticals, Inc., 35 Ohio St. 3d 123, 125 (1988).

       {¶ 20} "In determining whether dismissal on the basis of forum non conveniens is

proper, the trial court must consider the facts of each case, balancing the private interests of

the litigants and the public interest involving the courts and citizens of the forum state."

Estate of Rush at ¶ 35, citing Chambers at 126-127. Important private interests include (1)

the relative ease of access to sources of proof, (2) availability of compulsory process for

attendance of unwilling witnesses, (3) the cost of obtaining attendance of unwilling witnesses,

(4) the possibility of a view of the premises, if appropriate, and (5) all other practical problems

that make trial of a case easy, expeditious, and inexpensive. Id. at ¶ 36. Important public

interests include (1) the administrative difficulties and delay to other litigants caused by

congested court calendars, (2) the imposition of jury duty upon the citizens of a community

that has very little relation to the litigation, (3) a local interest in having localized controversies

decided at home, and (4) the appropriateness of litigating a case in a forum familiar with the

applicable law. Id. at ¶ 37.

       {¶ 21} "The decision whether to grant a motion to dismiss on the basis of forum non

conveniens rests with the trial court's discretion, the exercise of which an appellate court may

reverse only upon a showing of an abuse of discretion." Calvary at ¶ 19. "[W]here the [trial]

court has considered all relevant public and private interest factors, and where its balancing

of these factors is reasonable, its decision deserves substantial deference." Chambers at

127.

       {¶ 22} Calvary argues the trial court erred in dismissing its complaint on the basis of

forum non conveniens as the trial court "did not balance all of the forum non conveniens

factors" and did not give proper consideration to events that had occurred in the Illinois case,

mainly that Calvary had, at one point in time, been dismissed for lack of personal jurisdiction.
                                                 -8-
                                                                                      Butler CA2018-07-134

We find no merit to Calvary's arguments. Contrary to Calvary's assertions, the trial court

considered and balanced the relevant public and private interest factors. The trial court

noted it was being asked to "determine [Calvary's] rights under an Illinois contract * * * to

which it [was] not a party, and where at least one of the parties [would] always be a corporate

resident of Illinois." The court further noted that Calvary was asking the court to determine

whether Patel, an Illinois citizen who was not made a party to the Ohio action, conveyed

proprietary information belonging to an Illinois company to his new employer, Calvary. As the

trial court discussed, determination of the issues raised by Calvary's complaint – which

mirrored those issues raised by Coral in the Lake County Case – would likely require

witnesses who reside in Illinois, and may have no ties to Ohio, to be hauled into Ohio.

Furthermore, as alluded to by the trial court, resolution of the contractual issues between

Coral and Patel would involve application of Illinois law.

        {¶ 23} Furthermore, with respect to the fact that the Illinois court had, at one point in

time, dismissed Calvary from the Lake County Case due to a lack of personal jurisdiction, we

note that at the time of our remand and the trial court's determination of the merits of the

renewed motion to dismiss or stay proceedings, Coral had been given leave to file an

amended complaint in the Lake County Case. The amended complaint filed in the Lake

County Case once again named Calvary as a defendant and, by Calvary's own admission,

involved "identical issues" to those in the Ohio action. Illinois, therefore, remained a valid

forum where the disputed legal issues between the parties could be resolved.2

        {¶ 24} Accordingly, as the trial court complied with our instructions on remand,

properly     considered        the    important       public     and     private     interest     factors,     and

2. Calvary repeatedly argues in its brief that the Illinois court lacks personal jurisdiction over it. Its arguments
regarding jurisdiction are pending in the Lake County Court and this court will not speculate as to how the Illinois
court will resolve Calvary's jurisdictional arguments.
                                                        -9-
[Cite as Calvary Industries, Inc. v. Coral Chem. Co., 2019-Ohio-1288.]

reasonably balanced said factors in determining that dismissal of the Ohio action was

appropriate, we find no error in the trial court's decision to dismiss Calvary's complaint on the

basis of forum non conveniens. Calvary's second assignment of error is, therefore, overruled.

        {¶ 25} Judgment affirmed.

        S. POWELL and RINGLAND, JJ., concur.