Goldstein v. Christiansen - Ohio Supreme Court Opinion - Ohio Supreme Court Decision

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OPINIONS OF THE SUPREME COURT OF OHIO
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Goldstein et al., Appellants, v. Christiansen, Judge, et al.,
Appellees.
[Cite as Goldstein v. Christiansen (1994), Ohio
St.3d .]
Civil procedure -- Dismissal of complaint for writ of
prohibition seeking to prevent judge in common pleas court
case involving nonresidents from conducting further
proceedings -- Judgment affirmed when personal
jurisdiction is not patently and unambiguously lacking.
(No. 94-396 -- Submitted July 27, 1994 -- Decided
September 14, 1994.
Appeal from the Court of Appeals for Lucas County, No.
L-93-332.
On April 8, 1993, intervening appellees, eight limited
partners filed a complaint on behalf of ten limited
partnerships in the Lucas County Court of Common Pleas against
four general partners, various general and limited
partnerships, and relators-appellants, Donald J. Goldstein,
C.P.A., and Goldstein, Lewin & Co. Tussing v. Powell, Lucas
C.P. No. 93-0987. The limited partners, four of whom are Ohio
residents, are investors in the limited partnerships, which own
and operate bowling alleys in Florida, Texas and Louisiana.
Two of the ten limited partnerships were created in Ohio,
although they own and operate bowling alleys in Florida.
The complaint in Tussing v. Powell alleged that the four
general partners, both individually and through various
business entities, regularly solicited the plaintiff limited
partners and other Ohio residents to invest in the limited
partnerships, received funds from Ohio investors, regularly
disseminated financial information to Ohio investors, held
partnership meetings in Ohio, maintained a limited partnership
advisory committee in Ohio, and conducted their routine
business in Ohio. Two of the four general partners are Lucas
County residents and a third is a former Lucas County
resident. Ninety of the approximately two hundred and ten
investors in the various limited partnerships live in the
Toledo, Ohio area. The limited partners essentially claimed
that the general partners had engaged in a pattern of

self-dealing and conversion of partnership funds for their own
purposes without the knowledge and consent of the limited
partners.
Relators-appellants, Donald J. Goldstein, C.P.A., a
Florida resident, and Goldstein, Lewin & Co., a Florida
professional corporation in which Goldstein is a director,
officer and key employee, were employed at all pertinent times
as the accountants for the limited partnerships. The limited
partners alleged that appellants transacted business in Ohio by
participating in the Ohio activities of the general partners
and by regularly sending financial statements to the plaintiffs
and other Ohio investors. The limited partners claimed that
appellants had been guilty of malpractice in their capacity as
accountants for the limited partnerships, general partners, and
other affiliated business entities by (1) actively
participating in the decisions of the general partners on the
use of partnership funds, (2) possessing knowledge of the
general partners' misconduct, (3) consciously ignoring and
failing to disclose the misconduct to the limited partners, (4)
preparing and submitting misleading financial statements to the
limited partners that concealed the wrongdoing of the general
partners, and (5) misrepresenting to the limited partners that
they were not aware of any misconduct by the general partners.
On May 25, 1993, appellants filed a Civ.R. 12(B)(2) motion
to dismiss themselves from the common pleas court suit on the
basis that the Ohio court lacked personal jurisdiction over
them. In an affidavit attached to the dismissal motion,
appellant Goldstein stated, inter alia, that (1) neither
appellant had ever maintained a place of business in Ohio, (2)
appellants had never contracted to supply services or sell
goods to Ohio residents, (3) appellants did not possess any
license to act as accountants in Ohio, (4) appellants did not
solicit business in Ohio, (5) appellants did not own Ohio
property, (6) all accounting services provided by appellants to
the limited partnerships were performed in Florida, (7)
periodically, appellants mailed certain standard financial
information to limited partner investors, a number of whom
lived in Ohio, without regard to their places of residence, and
(8) the provision of accounting services by appellants did not
require filing any documents with the state of Ohio or a
physical inspection of Ohio property.
After the plaintiff limited partners filed affidavits in
opposition to appellants' dismissal motion, appellants filed an
additional affidavit that verified the factual statements
included in a reply brief in support of their dismissal motion,
including that (1) many of the investors to whom appellants
sent financial statements lived in Ohio, (2) all of the assets
of the two Ohio limited partnerships were in Florida, (3) the
financial information provided to Ohio residents were copies of
reports prepared for the various limited partnerships as a
whole, and (4) appellants never purposefully availed themselves
of the protection of the Ohio courts.
In a decision filed November 15, 1993,
respondent-appellee, Judge Robert G. Christiansen of the Lucas
County Court of Common Pleas, overruled appellants' Civ.R.
12(B)(2) dismissal motion. On November 29, 1993, appellants
filed a complaint which sought a writ of prohibition to prevent

Judge Christiansen from conducting further proceedings in the
common pleas court case. Appellants alleged that Judge
Christiansen's decision overruling their motion to dismiss for
lack of personal jurisdiction was "wrongly decided" and that
they possessed no adequate remedy in the ordinary course of
law. On January 7, 1994, the Lucas County Court of Appeals sua
sponte dismissed appellants' complaint for a writ of
prohibition on the basis that they had an adequate remedy by
way of appeal following trial and judgment in the underlying
common pleas court case.
This cause is now before the court upon an appeal as of
right.

Schnorf & Schnorf Co., L.P.A., and Barry F. Hudgin, for
appellants.
Anthony G. Pizza, Lucas County Prosecuting Attorney, and
Bertrand L. Puligandla, Assistant Prosecuting Attorney, for
appellee.
Jones & Scheich, Christopher F. Jones, Richard A. Scheich
and Martin B. Morrissey; Polese, Hiner & Nolan, Edwin A. Hiner,
Patricia E. Nolan and Lynn M. Allen, for intervening appellees
Denton Tussing et al.

Per Curiam. Appellants assert in their first, third,
fourth, and fifth propositions of law that the court of appeals
erred in denying their request for a writ of prohibition where
the common pleas court lacked personal jurisdiction over them.
In order to obtain a writ of prohibition, relators must
establish (1) that the court or officer against whom the writ
is sought is about to exercise judicial or quasi-judicial
power, (2) that the exercise of that power is unauthorized by
law, and (3) that denying a writ will result in injury for
which no other adequate remedy exists in the ordinary course
of law. State ex rel. Koren v. Grogan (1994), 68 Ohio St.3d
590, 629 N.E.2d 446. Since the parties agree that the first
part of the foregoing test is satisfied here, i.e., Judge
Christiansen is about to exercise judicial authority over
appellants by allowing the common pleas court case to proceed,
at issue are whether Judge Christiansen's actions are
unauthorized and an adequate legal remedy exists.
The court of appeals determined that appellants were not
entitled to a writ of prohibition because they "have available
to them the adequate legal remedy of appeal." Absent a patent
and unambiguous lack of jurisdiction, a court having general
jurisdiction of the subject matter of a case possesses
authority to determine its own jurisdiction, and a party
challenging the court's jurisdiction has an adequate remedy at
law via appeal from the court's holding that it has
jurisdiction. State ex rel. Bradford v. Trumbull Cty. Court
(1992), 64 Ohio St.3d 502, 597 N.E.2d 116; State ex rel.
Pearson v. Moore (1990), 48 Ohio St.3d 37, 548 N.E.2d 945.
Similarly, the court has applied the same standard to issues of
personal jurisdiction. State ex rel. Ruessman v. Flanagan
(1992), 65 Ohio St.3d 464, 605 N.E.2d 31. Therefore, absent a
patent and unambiguous lack of jurisdiction, appeal from a
decision overruling a Civ.R. 12(B)(2) motion to dismiss based
upon lack of personal jurisdiction will generally provide an

adequate legal remedy which precludes extraordinary relief
through the issuance of a writ of prohibition. Id.; see, also,
State ex rel. Smith v. Avellone (1987), 31 Ohio St.3d 6, 31 OBR
5, 508 N.E.2d 162. Consequently, in determining if the court
of appeals' judgment was erroneous, the dispositive issue is
whether the court of common pleas patently and unambiguously
lacked personal jurisdiction over appellants.
When determining whether a state court has personal
jurisdiction over a nonresident defendant, the court is
obligated to (1) determine whether the state's "long-arm"
statute and the applicable Civil Rule confer personal
jurisdiction, and if so, (2) whether granting jurisdiction
under the statute and rule would deprive the defendant of the
right to due process of law pursuant to the Fourteenth
Amendment to the United States Constitution. U.S. Sprint
Communications Co., Ltd. Partnership v. Mr. K's Foods, Inc.
(1994), 68 Ohio St.3d 181, 183-184, 624 N.E.2d 1048, 1051.
Judge Christiansen concluded that the common pleas court had in
personam jurisdiction over appellants because they had
transacted business in Ohio and the assertion of personal
jurisdiction comported with the Due Process Clause.
The complementary provisions of Ohio's "long-arm" statute,
R.C. 2307.382(A)(1) and Civ.R. 4.3(A)(1), authorize a court to
exercise personal jurisdiction over a nonresident defendant and
provides for service of process to effectuate that jurisdiction
when the cause of action arises from the nonresident
defendant's "[t]ransacting any business in this state [.]"
Because the [t]ransacting any business" phrase is so broad, the
statute and rule have engendered cases which have been resolved
on "'highly particularized fact situations, thus rendering any
generalization unwarranted.'" U.S. Sprint, supra, 68 Ohio
St.3d at 185, 624 N.E.2d at 1052, quoting 22 Ohio Jurisprudence
3d (1980) 430, Courts and Judges, Section 280; see, also, Wayne
Cty. Bur. of Support v. Wolfe (1991), 71 Ohio App.3d 765, 769,
595 N.E.2d 421, 424 ("test for minimum contacts is not
susceptible to mechanical application; rather, the facts of
each case must be weighed to determine whether the requisite
affiliating circumstances are present").
The term "transact" as utilized in the phrase
"[t]ransacting any business" encompasses "'to carry on
business'" and "'to have dealings,'" and is "'broader *** than
the word "contract"'." (Emphasis deleted.) Kentucky Oaks Mall
Co. v. Mitchell's Formal Wear, Inc. (1990), 53 Ohio St.3d 73,
75, 559 N.E.2d 477, 480. It has been noted that in
professional malpractice suits, in the absence of physical
contact with the forum state, the defendant professional has
almost always been found not to be transacting business under
long-arm provisions. 1 Casad, Jurisdiction in Civil Actions (2
Ed.1991) 4-43 to 4-44, Section 4.02[1][a]. Nevertheless, it
has been held that personal jurisdiction does not require
physical presence in the forum state. Kentucky Oaks Mall,
supra; see, also, Ucker v. Taylor (1991), 72 Ohio App.3d 777,
596 N.E.2d 507.
In the underlying common pleas court case, it appears that
Judge Christiansen did not hold an evidentiary hearing on
appellants' Civ.R. 12(B)(2) dismissal motion. Accordingly, he
was required to view allegations in the pleadings and the

documentary evidence in a light most favorable to the
plaintiffs, resolving all reasonable competing inferences in
their favor. See, generally, 1 Klein, Browne & Murtaugh,
Baldwin's Ohio Civil Practice (1988) 57, Section T 3.04(G)(1);
McCormac, Ohio Civil Rules Practice (2 Ed.1992) 145-146,
Section 6.17; Giachetti v. Holmes (1984), 14 Ohio App.3d 306,
14 OBR 371, 471 N.E.2d 165. The allegations included that
appellants actively participated in the general partners'
decisions on the use of partnership funds, prepared and
submitted misleading financial statements to the limited
partners by mailing these statements to Ohio, and
misrepresented to the limited partners that they were not aware
of any misconduct by the general partners. Additionally, a
substantial plurality of the limited partners/investors to whom
appellants had a duty to mail financial statements, i.e.,
ninety out of two hundred and ten, resided in the Toledo area.
Although appellants contend that they only owed a duty to
the partnerships and not the individual limited partners, a
partnership is an aggregate of individuals and does not
constitute a separate legal entity. Arpadi v. First MSP Corp.
(1994), 68 Ohio St.3d 453, 628 N.E.2d 1335, paragraph one of
the syllabus. In a limited partnership, the general partner
owes a fiduciary duty to the limited partners, and a
professional relationship established with one fiduciary, e.g.,
a general partner, extends to those in privity, e.g., a limited
partner, regarding matters to which the fiduciary duty
relates. Id. at paragraphs two and three of the syllabus.
Therefore, appellants owed a fiduciary duty to the Ohio limited
partners.
By engaging in a contractual relationship with limited
partnerships of which half of the general partners resided in
Ohio and obligating themselves to provide financial statements
to limited partners, with a plurality residing in Ohio, it is
not patent and unambiguous that the common pleas court lacked
in personam jurisdiction over them. The alleged dissemination
of misleading financial information to Ohio investors as part
of appellants' purported active participation in the general
partners' misconduct supports Judge Christiansen's finding that
appellants transacted business in Ohio.
Under the second step of the personal jurisdiction
analysis, a state court may assert personal jurisdiction over a
nonresident defendant if the nonresident possesses certain
minimum contacts with the state such that the maintenance of
the suit does not offend traditional notions of fair play and
substantial justice. Internatl. Shoe Co. v. Washington (1945),
326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95; U.S. Sprint, supra.
The constitutional touchstone is whether the nonresident
defendant purposefully established "minimum contacts" in the
forum state; purposeful establishment exists where, inter alia,
the defendant has created continuing obligations between
himself and residents of the forum. Burger King Corp. v.
Rudzewicz (1985), 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528;
Kentucky Oaks Mall, supra. Here, as Judge Christiansen noted
in his decision overruling appellants' Civ.R. 12(B)(2) motion,
the evidence included appellants' continuing duties to provide
the limited partners, a substantial number of whom reside in
Ohio, with financial information concerning the limited

partnerships.
Further, the Ohio court possesses a strong interest in
settling the dispute, since a large number of the investors
live in the Toledo area, half of the general partners also
reside in the Toledo area, Ohio residents had been allegedly
regularly solicited for money, and two of the limited
partnerships were created in Ohio. Additionally, requiring
appellants to litigate this case in Ohio places no excessive
burden on them because modern transportation and communications
have made it much less burdensome for a party sued to defend
himself in a state where he engages in economic activity.
Burger King, supra; U.S. Sprint, supra.
Appellants rely, inter alia, on State ex rel. Connor v.
McGough (1989), 46 Ohio St.3d 188, 546 N.E.2d 407, and State ex
rel. Stone v. Court (1984), 14 Ohio St.3d 32, 470 N.E.2d 899,
in support of their argument on appeal. In State ex rel.
Connor, we granted a writ of prohibition restraining an Ohio
court judge from exercising personal jurisdiction over a German
resident in an Ohio wrongful death action because personal
jurisdiction was "so totally lacking," where the nonresident
defendant had no known contacts with Ohio. 46 Ohio St.3d at
190-191, 546 N.E.2d at 410. In State ex rel. Stone, we
affirmed the allowance of a writ of prohibition to prevent an
Ohio court's exercise of personal jurisdiction over a Texas
resident in a paternity action, where the birth and conception
of the child occurred in Alabama. Conversely, under the
evidence before Judge Christiansen on this case, personal
jurisdiction over appellants was not patently and unambiguously
lacking.
Indeed, in appellant's brief, they claim that there were
"conflicting statements of fact below." Where personal
jurisdiction turns upon some fact to be determined by the trial
court, its ruling that it has jurisdiction, if wrong, is simply
error for which prohibition is not the proper remedy. State ex
rel. Clem Transp., Inc. v. Gaertner (Mo.1985), 688 S.W.2d 367,
368. Additionally, as set forth previously, any conflicting
evidence had to be construed most favorably to the
plaintiffs/limited partners in the common pleas court case.
See Giachetti, supra. In that Judge Christiansen's assertion
of personal jurisdiction over appellants was not patently and
unambiguously erroneous, the court of appeals correctly ruled
that the availability of appeal was an adequate legal remedy
which precluded prohibition relief. State ex rel. Ruessman,
supra. By so holding, we need not expressly rule on the
personal jurisdiction issue since our review is limited to
whether personal jurisdiction is patently and unambiguously
lacking. Id.; see, also, Canadian Helicopters, Ltd. v. Wittig
(Tex. 1994), 876 S.W.2d 304, where the Supreme Court of Texas
held similarly in a mandamus action concerning a trial court's
holding that it possessed personal jurisdiction over a
nonresident defendant. Therefore, appellants' first, third,
fourth, and fifth propositions are meritless.1
Appellants' second proposition of law asserts that the
court of appeals erred in sua sponte dismissing his complaint
for a writ of prohibition without allowing for the introduction
of evidence and further proceedings as provided by Loc.App.R. 6
of the Lucas County Court of Appeals. Appellants claim that

"[t]he presentation of a stipulation of facts would have been
in the interest of justice as there were conflicting statements
of fact below particularly concerning facts allegedly
constituting Goldstein's 'transacting business' in Ohio."
However, as noted previously, the resolution of conflicting
statements of fact before Judge Christiansen in the underlying
case was solely for him to decide, after construing the
evidence most favorably to the opponents of appellants' Civ.R.
12(B)(2) motion. An after-the-fact stipulation purportedly
"resolving" this conflict would not have been appropriate
evidence in the prohibition action. Based upon appellants'
complaint and exhibits attached and incorporated therein, they
could prove no set of facts entitling them to a writ of
prohibition and dismissal was appropriate.
Accordingly, for the foregoing reasons, the judgment of
the court of appeals dismissing appellants' complaint for a
writ of prohibition is affirmed.
Judgment affirmed.
Moyer, C.J., A.W. Sweeney, Wright, F.E. Sweeney and
Pfeifer, JJ., concur.
Douglas, J., concurs in judgment only.
Resnick, J., not participating.

FOOTNOTE
1 Since appellants arguably transacted business in Ohio
pursuant to Ohio's long-arm statute and rule, appellants' fifth
proposition of law, which asserts that the "tortious injury"
provision of the long-arm statute and rule did not apply, is
moot. Additionally, we note that Judge Christiansen's claim
that the General Assembly intended the long-arm statute "to
give Ohio courts jurisdiction to the limits of the Due Process
Clause" is erroneous, since that interpretation would render
the first part of the court's two-part analysis nugatory. See,
e.g., McCormac, Ohio Civil Rules Practice (2 Ed.1992) 49,
Section 3.10 ("Ohio has not extended long-arm jurisdiction to
the limits of due process"); 4 Harper & Solimine, Anderson's
Ohio Civil Practice (Supp.1993) 37, Section 150.33 ("If there
was an equivalence, presumably the first part of the test could
be redundant."); 1 Casad, supra, at 4-8 to 4-9, Section
4.01[1][b]. However, any error in this regard was harmless,
since Judge Christiansen still applied the appropriate two-part
analysis, and under that analysis, there was no patent and
unambiguous lack of jurisdiction.