Yes, personal jurisdiction in Ohio is required to sue and bring a lawsuit against a trustee in Ohio.
What is Personal Jurisdiction?
Personal jurisdiction is required to bring a lawsuit against someone. Does the court have jurisdiction over the person being sued such that the defendant may be properly sued in that jurisdiction. The United States Supreme Court, in the seminal personal jurisdiction case of International Shoe Co. v. Washington, 326 U.S. 310 (1945) held that a defendant must have a threshold amount of “minimum contacts” within a state to be sued in that state:
Historically, the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant’s person. Hence, his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him. Pennoyer v. Neff, 95 U.S. 714, 733. But now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that, in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”
Whether due process is satisfied must depend, rather, upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure. That clause does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations.
What is Required for Personal Jurisdiction in Ohio?
Every state has statutes that set forth the minimum contacts necessary for a court sitting in that state to have personal jurisdiction over a defendant. Ohio’s personal jurisdiction statute is set forth at Section 2307.382, as follows:
(A) A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person’s:
(1) Transacting any business in this state;
(2) Contracting to supply services or goods in this state;
(3) Causing tortious injury by an act or omission in this state;
(4) Causing tortious injury in this state by an act or omission outside this state if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state;
(5) Causing injury in this state to any person by breach of warranty expressly or impliedly made in the sale of goods outside this state when he might reasonably have expected such person to use, consume, or be affected by the goods in this state, provided that he also regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state;
(6) Causing tortious injury in this state to any person by an act outside this state committed with the purpose of injuring persons, when he might reasonably have expected that some person would be injured thereby in this state;
(7) Causing tortious injury to any person by a criminal act, any element of which takes place in this state, which he commits or in the commission of which he is guilty of complicity.
(8) Having an interest in, using, or possessing real property in this state;
(9) Contracting to insure any person, property, or risk located within this state at the time of contracting.
(B) For purposes of this section, a person who enters into an agreement, as a principal, with a sales representative for the solicitation of orders in this state is transacting business in this state. As used in this division, “principal” and “sales representative” have the same meanings as in section 1335.11 of the Revised Code.
(C) When jurisdiction over a person is based solely upon this section, only a cause of action arising from acts enumerated in this section may be asserted against him.
How to Obtain Personal Jurisdiction Over a Trustee in Ohio
The determination whether an Ohio trial court has personal jurisdiction over an out-of-state defendant requires a two-step inquiry. First, the court must determine whether the defendant’s conduct falls within Ohio’s long-arm statute or the applicable civil rule. If it does, then the court must consider whether the assertion of jurisdiction over the nonresident defendant would deprive the defendant of due process of law under the Fourteenth Amendment to the United States Constitution.
Schwab v. Schwab, 2020-Ohio-560 (Ct. App.). The Schwab case sets forth the necessity of having personal jurisdiction over a trustee of a trust to sue the trustee in Ohio. David Schwab was a beneficiary of a trust and a member of a 3-member advisory committee that was charged with directing the trustee. The trustee was Huntington Bank, and then Home Savings Bank. Home Savings Bank issued a check to David Schwab , as trustee of the Schwab Irrevocable Trust. David was unable to determine the taxpayer identification number for the trust, so deposited the check in a personal account at the direction of the settlor of the trust, his father.
David’s sister, Mary, sued David for breach of trust. Mary’s sole argument in support of personal jurisdiction to sue the trustee in Ohio was the deposit into his personal bank account of the check. David lived in Fort Myers, Florida and deposited the check into a Florida bank account. The check was drawn from an account in Ohio.
In ruling that Ohio had no personal jurisdiction over David, the court ruled as follows:
Upon review, we do not find the mere act of receiving a check, which contained an Ohio address and may or may not have been sent from Ohio, by Appellee in Florida, without evidence of any solicitation or further involvement by Appellee, amounts to “transacting business” in the state of Ohio for purposes of exercising personal jurisdiction over Appellee pursuant to Ohio’s long-arm statute.
Unfortunately, the trial court issued its ruling in the form of a directed verdict after a jury trial. That ruling was affirmed on appeal. Mary, the plaintiff, would have spent a great deal of money on attorney fees in discovery, motion practice, and the trial. The lesson from the Schwab case is that having a solid basis for personal jurisdiction over a defendant is critical – because the lack of personal jurisdiction can destroy an otherwise valid claim against a defendant. To be clear, the trial court also issued a directed verdict on the substance of the claim, and held that there was no breach of fiduciary duty.
A directed verdict is requested after the close of the presentation of evidence in a jury trial, but before the jury is handed the case to decide. The judge overseeing the case makes a determination as to whether the law and/or the facts should even permit the case to be decided by the jury.
