Court Opinion

ID: 6758677
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:29:32.841128+00
Date Added: 2024-06-11T16:02:31.861160
License: Public Domain

Holmes, J.,
dissenting. The majority herein incorrectly perceives this matter as one in contract and, therefore, its reliance on our prior pronouncement in Schulke Radio Productions, Ltd. v. Midwestern Broadcasting Co. (1983), 6 Ohio St. 3d 436, is misplaced. Accordingly, I must dissent.
In Schulke, supra, this court was confronted with a purchasing agreement executed by two foreign corporations. The entities specifically designated in the contract that all matters between the parties were to be settled in accordance with New York law. We upheld their designation pursuant to the standard concerning contractual agreements set forth in Section 187 of 1 Restatement of the Law 2d, Conflict of Laws (1971) 561.
In the present case, however, the appellate court correctly determined that this issue is one of corporate law, not contract law. It then proceeded to analyze the case according to Section 302(2) of 2 Restatement of the Law 2d, Conflict of Laws (1971) 306, which deals with the rights and liabilities of a corporation. This section provides:
“The local law of the state of incorporation will be applied to determine such issues, except in the unusual case where, with respect to the particular issue, some other state has a more significant relationship to the occurrence and the parties, in which event the local law of the other state will be applied.”
In my view, with respect to the issues presented herein, Ohio does not have a more significant relationship than Delaware to the occurrence and the parties. The application of the law of the state of incorporation is clearly supported by the need of certainty, predictability and uniformity of result, as well as the protection of the justified expectations of the parties involved. A business incorporated under Delaware law should be able to expect Delaware statutory provisions to control entirely intracorporate matters. However, with the precedent set by the majority today, this expectation seemingly would no longer pertain.
Therefore, I would affirm the judgment of the appellate court which applied Delaware law to the facts presented.
W. Brown, J., concurs in the foregoing dissenting opinion.