Trinity Health System v. Mdx Corp. , 2009 Ohio 417 ( 2009 )

{¶ 41} I concur in the majority's disposition of Trinity's first and second assignments of error. I respectfully dissent from the majority as to the third assignment of error, because the trial court sua sponte dismissed Trinity's declaratory-judgment action without prior notice to the parties. A portion of a complaint does not automatically invoke summary proceedings such as a motion pursuant to Civ. R. 12(C) or Civ. R. 12(B) simply because it requests a declaratory judgment. A declaratory-judgment action requires the same procedural safeguards as any other complaint, and a party to such an action is not afforded less due process just because the claim relates to the meaning of a law or a contract term rather than a dispute of facts. Accordingly, the trial court's separate judgment entry dismissing Trinity's request for declaratory judgment should be reversed.

{¶ 42} On March 15, 2007, the trial court issued two separate journal entries for this case. The first entry addressed appellants' motion for judgment on the pleadings and disposed of those issues as discussed in the majority opinion. The second, separate, journal entry stated that "Count III of Plaintiff's motion for Declaratory Judgment as to MDX is herebyoverruled in the context in which the issue has been raised, in that Plaintiff's [sic] have failed to state a claim upon which relief can be granted. If Plaintiff/Trinity Management Services Organization wishes to pursue claims of illegal use of corporate or partnership assets then the Plaintiff may pursue the same in the filing of an appropriate action." (Emphasis sic.)

{¶ 43} Trinity's motion for judgment on the pleadings did not incorporate count three at any point. The face of Trinity's motion explicitly prays that the trial court "issue an order granting Plaintiffs judgment on the pleadings as to Counts I and II of the Complaint." Trinity's memorandum in support only addresses the factual and legal issues related to the first and second counts of the complaint and does not incorporate or refer to the issues of count three. Finally, in Trinity's prayer for relief at the end of its memorandum, Trinity again explicitly states that it is asking for a "judgment on the pleadings as to Counts I and II of the Complaint."

{¶ 44} Nonetheless, the trial court dismissed Trinity's request for declaratory judgment in count three for failure to state a claim upon which relief could be granted, which is the language of Civ. R. 12(B)(6). A trial court may sua sponte dismiss a claim pursuant to Civ. R. 12(B)(6) "only after the parties are given notice of the court's intention to dismiss and an opportunity to respond." State ex rel.Edwards v. Toledo City School Dist. Bd. of Edn., (1995),72 Ohio St. 3d 106, 108, 647 N.E.2d 799.

{¶ 45} A court's dismissal "sua sponte, and without notice to the parties is fundamentally unfair to litigants. It places the court in the role of a `proponent rather than an independent entity.' Franklin v. OregonState Welfare Div. (C.A.9, 1981) 662 F.2d 1337, 1342. Sua sponte dismissals also prejudice the appellant as they deny any opportunity to amend the complaint or otherwise respond to the alleged insufficiency." Mayrides v. Franklin Cty.Prosecutor's Office (1991), 71 Ohio App. 3d 381, 383-384,594 N.E.2d 48. See also State ex rel. Edwards at 108,647 N.E.2d 799; Wells v. Wells (2001), 7th Dist. No. 00 BA 11, 2001 WL 1155845.

{¶ 46} There is an exception. Sua sponte dismissal without notice is acceptable when "the complaint is frivolous or the claimant obviously cannot prevail on the facts alleged in the complaint." State ex rel. Fogle v.Steiner (1995), 74 Ohio St. 3d 158, 161, 656 N.E.2d 1288. The exception does not apply to this case. The trial court stated in its judgment entry that the declaratory-judgment action was not an appropriate action to pursue claims of illegal use of corporate or partnership assets. While this may or may not be true based on the issues specific to this case, it does not necessarily "appear beyond doubt that [Trinity] can prove no set of facts warranting relief." State ex rel.Edwards, 72 Ohio St.3d at 108, 647 N.E.2d 799.

{¶ 47} An accounting is generally a prerequisite to an action at law involving a partnership due to the complexity of affairs, but there are some exceptions. Dunnv. Zimmerman (1994), 69 Ohio St. 3d 304, 307-308,631 N.E.2d 1040. Trinity's complaint was narrowly limited, both in scope and time, which may not "require a searching inquiry into partnership affairs." Id. at 308, 631 N.E.2d 1040. Thus, count three of Trinity's complaint does not, on its face, request relief that is impossible or otherwise frivolous. Accordingly, the exception should not apply, and notice was required.

{¶ 48} None of the parties filed a motion addressing count three of Trinity's complaint. The trial court entered a pretrial judgment on count three of Trinity's complaint without providing notice or further hearing. Accordingly, the trial court's sua sponte dismissal of count three was erroneous, and Trinity's third assignment of error is meritorious. Accordingly, I would reverse the trial court's decision as to count three and remand the declaratory-judgment matter for further proceedings.