Court Opinion

ID: 2705740
Source: CourtListenerOpinion
Date Created: 2014-08-04 22:40:00.309025+00
Date Added: 2024-06-11T13:11:00.169180
License: Public Domain

[Cite as Discover Bank v. Sweeney, 2012-Ohio-5402.]

STATE OF OHIO                    )                         IN THE COURT OF APPEALS
                                 )ss:                      NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT                 )

DISCOVER BANK C/O DB SERVICING                             C.A. No.    26340
CORPORATION

        Appellee
                                                           APPEAL FROM JUDGMENT
        v.                                                 ENTERED IN THE
                                                           COURT OF COMMON PLEAS
MARK SWEENEY                                               COUNTY OF SUMMIT, OHIO
                                                           CASE No.   CV 2011 07 3955
        Appellant

                                DECISION AND JOURNAL ENTRY

Dated: November 21, 2012

        BELFANCE, Judge.

        {¶1}    Mark Sweeney appeals the trial court’s award of summary judgment to Discover

Bank and its denial of his motion for summary judgment. For the reasons set forth below, we

reverse.

                                                      I.

        {¶2}    Discover Bank filed a complaint alleging that Mr. Sweeney had failed to make

minimum monthly payments on his credit card accounts. Next to Discover Bank’s name on the

complaint, “c/o DB Servicing Corporation” had been stamped.              Discover Bank moved for

summary judgment, but the trial court withheld ruling on the motion until after discovery had

been completed. Following discovery, Mr. Sweeney moved for summary judgment, arguing that

Discover Bank was a foreign corporation not licensed to conduct business in Ohio and, therefore,

lacked capacity to maintain the action against him.              He also argued that DB Servicing

Corporation was not the real party in interest in the action.
                                                 2

          {¶3}   Discover Bank responded, arguing that DB Servicing Corporation was licensed to

conduct business in Ohio and that DB Servicing Corporation was maintaining the suit on its

behalf.    However, while Discover Bank submitted documentation retrieved from the Ohio

Secretary of State’s website that indicated that DB Servicing Corporation was licensed to

conduct business in Ohio, it stated in its responses to discovery that the account had not been

assigned to DB Servicing Corporation. It also submitted the affidavit of Robert Adkins, who

averred that Discover Bank was a Delaware Bank.

          {¶4}   Mr. Sweeney moved in opposition to Discover Bank’s motion for summary

judgment, again arguing that Discover Bank lacked capacity to maintain the action against him.

The trial court denied Mr. Sweeney’s motion for summary judgment and granted Discover

Bank’s motion. Mr. Sweeney has appealed, raising three assignments of error. For ease of

discussion, we address his first two assignments of error together.

                                               II.

                                  ASSIGNMENT OF ERROR I

          THE TRIAL COURT ERRED IN ITS FEBRUARY 29, 2012 JUDGMENT
          ENTRY DENYING SWEENEY’S MOTION FOR SUMMARY JUDGMENT[.]

                                  ASSIGNMENT OF ERROR II

          THE TRIAL COURT ERRED IN ITS FEBRUARY 29, 2012 JUDGMENT
          ENTRY GRANTING DISCOVER BANK’S MOTION FOR SUMMARY
          JUDGMENT[.]

          {¶5}   Mr. Sweeney argues that the trial court erred when it granted summary judgment

to Discover Bank. Instead, he argues, it should have granted summary judgment to him because

Discover Bank lacked capacity to maintain the action against him.

          {¶6}   This Court reviews an award of summary judgment de novo. Grafton v. Ohio

Edison Co., 77 Ohio St.3d 102, 105 (1996). “We apply the same standard as the trial court,
                                                  3

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.” Garner v. Robart, 9th Dist. No. 25427, 2011–

Ohio–1519, ¶ 8.

         {¶7}   Pursuant to Civ.R. 56(C), summary judgment is appropriate when:

         (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). To succeed on a summary

judgment motion, the movant bears the initial burden of demonstrating that there are no genuine

issues of material fact concerning an essential element of the opponent’s case. Dresher v. Burt,

75 Ohio St.3d 280, 292 (1996). If the movant satisfies this burden, the nonmoving party “‘must

set forth specific facts showing that there is a genuine issue for trial.’” Id. at 293, quoting Civ.R.

56(E).

         {¶8}   At issue in this case is R.C. 1703.29(A), which provides that

         [t]he failure of any corporation to obtain a license under sections 1703.01 to
         1703.31, inclusive, of the Revised Code, does not affect the validity of any
         contract with such corporation, but no foreign corporation which should have
         obtained such license shall maintain any action in any court until it has obtained
         such license.

R.C. 1703.03 provides that “[n]o foreign corporation not excepted from sections 1703.01 to

1703.31 of the Revised Code, shall transact business in this state unless it holds an unexpired and

uncanceled license to do so issued by the secretary of state.” A foreign corporation is “a

corporation incorporated under the laws of another state or a bank, savings bank, or savings and

loan association chartered under the laws of the United States, the main office of which is

located in another state.” R.C. 1703.01(B).
                                                 4

        {¶9}    Mr. Sweeney argued in his motion for summary judgment that Discover Bank

lacked capacity to maintain the action against him because it was a foreign corporation and was

not licensed to do business in Ohio. He also argued that DB Servicing Corporation lacked

standing to maintain the suit because it had never been assigned the account at issue in this case.

In support, Mr. Sweeney attached an affidavit in which he averred that he “searched Ohio

Secretary of State business filings and found no current listing for Discover Bank.” He also

submitted Discover Bank’s answers to his interrogatories, which indicated that DB Servicing

Corporation had never been assigned the account and that DB Servicing Corporation was “not a

party to this action.”

        {¶10} Discover Bank argued in its motion in opposition that DB Servicing Corporation

was licensed to conduct business in Ohio and, therefore, had capacity to maintain the action

against Mr. Sweeney. In support, it attached printouts from the Ohio Secretary of State website

that indicated that DB Servicing Corporation was licensed to conduct business in Ohio.

Discover Bank also submitted the affidavit of Robert Adkins, who averred that Discover Bank

“is a FDIC-insured Delaware State bank * * *.”

        {¶11} Based upon the record in this case, there is no dispute that Discover Bank is a

foreign corporation. Furthermore, Mr. Sweeney’s affidavit is uncontroverted, meaning that, even

when viewed in the light most favorable to Discover Bank as the non-moving party, there is no

genuine dispute that Discover Bank is not licensed to conduct business in Ohio. Thus, by the

plain language of R.C. 1703.29(A), it could not maintain this action against Mr. Sweeney.

        {¶12} Nevertheless, Discover Bank argues that it had capacity to maintain the action

against Mr. Sweeney, asserting that R.C. 1703.29(A) is inapplicable to it because it is a national

bank. However, we note that this is a different argument than the one Discover Bank made in
                                               5

opposition to Mr. Sweeney’s motion for summary judgment, and this Court will not address

arguments in the first instance. See, e.g., Paterson v. Equity Trust Co., 9th Dist. 11CA009993,

2012-Ohio-860, ¶ 18. Furthermore, there is no evidence in the record that Discover Bank is a

national bank. In fact, Discover Bank maintained, through Mr. Adkins’ affidavit, that it was a

Delaware bank. Even when viewed in the light most favorable to Discover Bank, there is no

dispute that Discover Bank is a Delaware bank and not a national bank.

       {¶13} Notably, Discover Bank does not advance on appeal the arguments it made in the

trial court in its motion in opposition to Mr. Sweeney’s motion for summary judgment. Discover

Bank’s argument below was essentially that DB Servicing Corporation was handling the action

for Discover Bank and DB Servicing Corporation was not prohibited from maintaining an action

by R.C. 1703.29(A) because it was licensed to conduct business in Ohio. However, Discover

Bank, in its answers to Mr. Sweeney’s interrogatories stated that DB Servicing Corporation was

not a party to the action. Furthermore, Discover Bank stated that the debt in question had never

been assigned to DB Servicing, thus negating any suggestion that DB Servicing was the real

party in interest. Discover Bank has not put forth any authority that would suggest it could gain

capacity to maintain the action in this case through DB Servicing under these circumstances, nor

has this Court’s own research uncovered any such authority. See Cardone v. Cardone, 9th Dist.

No. 18349, 1998 WL 224934, * 8 (May 6, 1998).

       {¶14} Viewing the evidence contained in the record below in the light most favorable to

Discover Bank, there is no dispute that it was a Delaware bank that was not licensed to conduct

business in Ohio. Therefore, it lacked capacity to initiate and maintain this action against Mr.

Sweeney. Furthermore, it was undisputed that DB Servicing Corporation was not a party to the
                                                 6

action. Accordingly, Mr. Sweeney’s motion for summary judgment should have been granted,

and Discovery Bank’s motion should have been denied.

       {¶15} Mr. Sweeney’s first two assignments of error are sustained.

                                 ASSIGNMENT OF ERROR III

       THE TRIAL COURT ERRED IN FEBRUARY 29, 2012 JUDGMENT ENTRY
       AWARDING 19.99% INTEREST[.]

       {¶16} In light of our resolution of Mr. Sweeney’s other assignments of error, this

assignment of error is moot, and, therefore, we decline to address it. See App.R. 12(A)(1)(c).

                                              III.

       {¶17} Mr. Sweeney’s first two assignments of error are sustained, and his third

assignment of error is moot. The judgment of the Summit County Court of Common Pleas is

reversed, and the matter is remanded for the trial court to enter judgment in favor of Mr.

Sweeney.

                                                                              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 Court of Common

Pleas, 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
                                                7

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.

                                                    EVE V. BELFANCE
                                                    FOR THE COURT

WHITMORE, P. J.
MOORE, J.
CONCUR.

APPEARANCES:

MARK SWEENEY, pro se, Appellant.

MATTHEW G. BURG, Attorney at Law, for Appellee.