Ferrand Laser Screeding, Inc., Reliable Equipment Rental Inc., Reliable Screeding Inc., Kenny Ferrand, and Billy Ferrand v. Concrete Management Solutions, LLC ( 2020 )

FILED
Jun 11 2020, 7:51 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
KENNY FERRAND Fred L. Cline
Leanna Weissmann Oliver & Cline, LLP
Lawrenceburg, Indiana Danville, Indiana
ATTORNEY FOR APPELLANTS
FLS, RER, RS, AND BILLY FERRAND
Joel C. Wieneke
Wieneke Law Office, LLC
Brooklyn, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Ferrand Laser Screeding, Inc., June 11, 2020
Reliable Equipment Rental Inc., Court of Appeals Case No.
Reliable Screeding Inc., 19A-PL-1947
Kenny Ferrand, and Appeal from the
Billy Ferrand, Putnam Circuit Court
Appellants, Cross-Appellees, The Honorable
Defendants, Matthew Headley, Judge
v. Trial Court Cause No.
67C01-1508-PL-0244
Concrete Management
Solutions, LLC,
Appellee, Cross-Appellant, Plaintiff
Vaidik, Judge.
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Case Summary
[1] Concrete Management Solutions, LLC (CMS) brought an action against
Ferrand Laser Screeding, Inc., Reliable Equipment Rental Inc., Reliable
Screeding Inc., Kenny Ferrand, and Billy Ferrand (“the Defendants”), seeking
to domesticate and collect on an Ohio judgment. The trial court ruled for CMS
on some claims and for the Defendants on the others. The Defendants appeal,
and CMS cross-appeals. We hold that the Ohio court lacked personal
jurisdiction, that as a result the Ohio judgment is void, and that the Defendants
are therefore entitled to judgment on all of CMS’s claims.
Facts and Procedural History
[2] In 2010, CMS, an Ohio limited liability company, contracted with Subway
Restaurants to construct a concrete parking lot in Milford, Connecticut. CMS
then hired Ferrand Laser Screeding, Inc. (FLS), an Indiana corporation owned
and operated by Billy Ferrand, to provide laser-screeding services on the
project. (Laser screeding is a method of leveling concrete.) In early 2012, CMS
was sued in relation to the project in Medina County, Ohio. It then filed a third-
party complaint against FLS, claiming that FLS “breached its agreement with
CMS by failing to properly finish the parking lot causing divots in the concrete,
uneven concrete and visually unappealing concrete.” Appellants’ App. Vol. II
p. 78. FLS did not answer the complaint, and in June 2012 CMS obtained a
default judgment for $155,121.54.
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[3] In August 2015, having received no payments on the judgment, CMS brought
an action against FLS in Putnam County, Indiana. CMS also named as
defendants Billy Ferrand, Billy’s brother Kenny Ferrand, Reliable Equipment
Rental Inc. (RER), and Reliable Screeding Inc. (RS). CMS alleged that after it
sued FLS in Ohio, Billy and Kenny formed RER and RS in Indiana and then
executed an agreement transferring FLS’s assets to RER. According to CMS,
“RER was formed to transfer the business of FLS to RER for the sole purpose
of avoiding the creditors of FLS and to avoid paying FLS’s debt to Plaintiff.”
Id. at 34. In Count I of the complaint, CMS requested domestication of the
Ohio judgment. In Count II, it alleged that the Defendants “engaged in
fraudulent acts in furtherance of a fraudulent scheme to transfer all of the assets
of FLS out of the reach of CMS” and that as a result the transfer was voidable
under the Uniform Fraudulent Transfer Act (specifically, Indiana Code section
32-18-2-14). Id. at 33. In Count III, CMS claimed that RER is an “alter ego” of
FLS and is liable to CMS for FLS’s debt. Id. at 34.
[4] The Defendants responded to CMS’s complaint with a motion to dismiss,
arguing, among other things, that the Ohio court lacked personal jurisdiction
over FLS and that the Ohio judgment was therefore void. After a hearing, the
trial court denied the motion to dismiss. The Defendants then moved for
summary judgment, making the same personal-jurisdiction argument and also
challenging CMS’s fraudulent-transfer claim. The trial court denied that
motion in January 2018. The same month, CMS amended its complaint to add
a claim that transferring FLS’s assets constituted criminal fraud under Indiana
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Code section 35-43-5-4(8) and that CMS is therefore entitled to treble damages
under Indiana’s Crime Victims Relief Act (CVRA), see Ind. Code § 34-24-3-1.
CMS also added an allegation that “Billy and Kenny are liable to Plaintiff for
the debts of FLS because they are alter egos of FLS.” Appellants’ App. Vol. II
p. 194.
[5] The trial court held a bench trial in May 2019. In its final order, the court (1)
domesticated the Ohio judgment against FLS and (2) “pierced the corporate
veil” of FLS and held the other defendants liable for the judgment. However,
the court concluded that CMS had not proven its fraudulent-transfer and
CVRA claims and entered judgment for the Defendants on those claims.
[6] The Defendants now appeal, and CMS cross-appeals.
Discussion and Decision
[7] The Defendants renew their argument that the Ohio court lacked personal
jurisdiction over FLS and that the Ohio judgment is therefore void and not
eligible for domestication in Indiana. They also argue that even if the Ohio
judgment is valid, the trial court erred by piercing FLS’s corporate veil and
holding the other defendants liable for the judgment. CMS disputes those
arguments and, in its cross-appeal, asserts that the trial court erred by rejecting
its fraudulent-transfer and CVRA claims. We agree with the Defendants that
the Ohio court lacked personal jurisdiction and therefore reverse the trial court’s
domestication of the Ohio judgment. And because CMS’s veil-piercing,
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fraudulent-transfer, and CVRA claims are based on the existence of a valid
Ohio judgment, those claims are moot, and the trial court should have
dismissed them without reaching their merits.1
[8] A judgment of a sister state is presumed to be valid but is “open to collateral
attack for want of personal jurisdiction or subject matter jurisdiction.”
Commercial Coin Laundry Sys. v. Enneking, 766 N.E.2d 433, 439 (Ind. Ct. App.
2002). The party attacking such a judgment has the burden of rebutting the
presumption of validity. Id. In assessing a claim that a foreign judgment is void
for lack of personal jurisdiction, we apply the law of the state where the
judgment was rendered. Id.[9] In Ohio, a trial court can have personal jurisdiction over an out-of-state
defendant only if the state’s “long-arm statute and the applicable rule of civil
procedure confer jurisdiction.” Kauffman Racing Equip., L.L.C. v. Roberts, 930
N.E.2d 784, 790 (Ohio 2010). The jurisdiction granted by Ohio’s long-arm
statute is more limited than long-arm jurisdiction under Indiana law. In
Indiana, long-arm jurisdiction is governed by Indiana Rule of Trial Procedure
4.4(A), which provides:
(A) Acts Serving as a Basis for Jurisdiction. Any person or
organization that is a nonresident of this state, a resident of this
state who has left the state, or a person whose residence is
unknown, submits to the jurisdiction of the courts of this state as
1
CMS does not argue that its veil-piercing, fraudulent-transfer, and CVRA claims are viable without the
domestication of the Ohio judgment.
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to any action arising from the following acts committed by him
or her or his or her agent:
(1) doing any business in this state;
(2) causing personal injury or property damage by an act
or omission done within this state;
(3) causing personal injury or property damage in this
state by an occurrence, act or omission done outside this
state if he regularly does or solicits business or engages in
any other persistent course of conduct, or derives
substantial revenue or benefit from goods, materials, or
services used, consumed, or rendered in this state;
(4) having supplied or contracted to supply services
rendered or to be rendered or goods or materials furnished
or to be furnished in this state;
(5) owning, using, or possessing any real property or an
interest in real property within this state;
(6) contracting to insure or act as surety for or on behalf
of any person, property or risk located within this state at
the time the contract was made;
(7) living in the marital relationship within the state
notwithstanding subsequent departure from the state, as to
all obligations for alimony, custody, child support, or
property settlement, if the other party to the marital
relationship continues to reside in the state; or
(8) abusing, harassing, or disturbing the peace of, or
violating a protective or restraining order for the protection
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of, any person within the state by an act or omission done
in this state, or outside this state if the act or omission is
part of a continuing course of conduct having an effect in
this state.
In addition, a court of this state may exercise jurisdiction on
any basis not inconsistent with the Constitutions of this state
or the United States.
(Emphasis added). That last provision—“a court of this state may exercise
jurisdiction on any basis not inconsistent with the Constitutions of this state or
the United States”—means that an Indiana trial court can have personal
jurisdiction over an out-of-state defendant even if the action does not arise from
the defendant committing one of the acts enumerated in subsections (1)-(8). In
other words, Indiana has “general jurisdiction” over an out-of-state defendant
who has had “continuous and systematic” contacts with Indiana “even in
causes of action unrelated to the defendant’s contacts with” Indiana.
LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 967 (Ind. 2006).
[10] Like Indiana’s Trial Rule 4.4(A), Ohio’s long-arm statute—Ohio Revised Code
2307.382—provides that a court has personal jurisdiction over an out-of-state
defendant if the action arises from the defendant committing one of several acts
in Ohio:
(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;
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(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;
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(9) Contracting to insure any person, property, or risk
located within this state at the time of contracting.[2]
Unlike Indiana’s rule, though, the Ohio statute does not include an “any
constitutional basis” provision. As a result, it has been held that “under Ohio
law, a court may exercise personal jurisdiction over a non-resident defendant
only if specific jurisdiction can be found under one of the enumerated bases
in Ohio’s long-arm statute.” Conn v. Zakharov, 667 F.3d 705, 718 (6th Cir.
2012) (emphasis added). Ohio’s long-arm statute does not allow for “general
jurisdiction” over out-of-state defendants—an Ohio court has personal
jurisdiction over such a defendant only if the action arises from the defendant
committing one of the specifically enumerated acts in Ohio.3
[11] Here, the Defendants contend that the only act on the Ohio list that could apply
is the first one—“Transacting any business in this state”—and that FLS
contracting with an Ohio company to work on a Connecticut project did not
amount to “transacting business” in Ohio. CMS does not dispute that
“Transacting any business in this state” is the relevant subsection but argues
2
Ohio Rule of Civil Procedure 4.3 largely tracks this statute.
3
The Ohio Legislature is currently considering a bill—House Bill 272—that would add an “any
constitutional basis” provision to the state’s long-arm statute. See House Bill 272,
https://www.legislature.ohio.gov/legislation/legislation-summary?id=GA133-HB-272 (last visited June 9,
2020). Of course, even if that bill becomes law, it would not impact our analysis of whether the Ohio court
had personal jurisdiction over FLS in 2012.
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that FLS did “transact business” in Ohio when it entered into the contract. We
agree with the Defendants.
[12] The Defendants direct us to Ashton Park Apartments, Ltd. v. Carlton-Naumann
Construction, Inc., No. L-08-1396, 2009-Ohio-6335, 2009 WL 4446934 (Ohio Ct.
App. Dec. 4, 2009). There, an Ohio couple contracted with a Florida
construction company to build a house in Florida. After a defect was discovered
in the house, the construction company was sued in Ohio. The company moved
for summary judgment, claiming that the Ohio court lacked personal
jurisdiction over it. The trial court agreed and dismissed the action. The Court
of Appeals affirmed. The court acknowledged that “[e]very aspect of the
contract” concerning the buyers—their execution of the contract, payments,
and communication—involved Ohio, 2009 WL 4446934 at *4, but ultimately
held that the construction company “was not ‘transacting business’ in Ohio by
entering into a single contract with two Ohio residents to build a home in
Florida,” id. at *5.
[13] Despite the Defendants’ heavy reliance on Ashton Park, CMS fails to even
acknowledge the decision. Instead, CMS argues that this case is governed by
Kentucky Oaks Mall Co. v. Mitchell’s Formal Wear, Inc., 559 N.E.2d 477 (Ohio
1990). There, a Georgia company entered into a lease for a storeroom in a
Kentucky mall owned by an Ohio company. The lease was for ten years and
required the Georgia company to send all lease payments to an Ohio address.
The Ohio company later sued the Georgia company in Ohio, alleging that the
Georgia company was in default. The Georgia company moved to dismiss for
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lack of personal jurisdiction. The trial court granted the motion. The Ohio
Supreme Court reversed, holding that “a commercial nonresident lessee, for
purposes of personal jurisdiction, is ‘transacting any business’ within the plain
and common meaning of the phrase, where the lessee negotiates, and through
the course of dealing becomes obligated, to make payments to its lessor in
Ohio.” Id. at 480.
[14] The case before is much more like Ashton Park than Kentucky Oaks. Unlike the
Georgia lessee in Kentucky Oaks, which agreed to make payments to an Ohio
lessor for ten years (a fact that CMS does not mention in its brief), FLS did not
agree to any ongoing obligations in Ohio. To the contrary, just as the
construction company in Ashton Park entered into a single contract with two
Ohio residents to build a home in Florida, FLS entered into a single contract
with an Ohio company to work on a project in Connecticut. Under Ashton Park,
this did not constitute “transacting business” in Ohio. As such, Ohio’s long-arm
statute did not confer personal jurisdiction over FLS, and the Ohio judgment is
void.
[15] The trial court should have denied CMS’s request for domestication of the Ohio
judgment. And because CMS’s veil-piercing, fraudulent-transfer, and CVRA
claims are moot without the domestication of the Ohio judgment, the trial court
should have dismissed them without reaching their merits. We reverse the
judgment of the trial court and remand this matter for the entry of a revised
judgment consistent with this opinion.
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[16] Reversed and remanded.
May, J., and Robb, J., concur.
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