COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 68936 COMPUTER COLOR LAB, INC. : : Plaintiff-appellee : : JOURNAL ENTRY -vs- : AND : OPINION REIMER STUDIOS, ET AL. : : Defendant-appellants : : DATE OF ANNOUNCEMENT : DECEMBER 14, 1995 OF DECISION : CHARACTER OF PROCEEDING : Civil appeal from Court of Common Pleas : Case No. CV-273972 JUDGMENT : REVERSED, FINAL JUDGMENT FOR APPELLANTS. DATE OF JOURNALIZATION : APPEARANCES: For plaintiff-appellee: For defendant-appellants: SCOTT S. WELTMAN, ESQ. ROBERT J. WILLIS, ESQ. Weltman, Weinberg & Assoc. 5001 Mayfield Road, #208 Lakeside Place Lyndhurst, OH 44124 323 Lakeside Avenue, West Cleveland, OH 44113 - 2 - PATTON, C.J. This is an appeal from a summary judgment rendered in favor of plaintiff-appellee Computer Color Lab, Inc. and against defendant- appellant Rob Sturm. The primary issue raised by the first and second assignments of error is whether the trial court properly found Sturm an agent of co-defendant Reimer Studios and thus personally liable for a debt Reimer Studios owed Computer Color Labs. In their cross-motions for summary judgment, the parties did not dispute the underlying facts. They seek a determination of liability as a matter of law. In January 1993, Sturm approached Jim Brown, the owner of Computer Color Lab, and inquired whether he could perform photographic services for his uncle, Hans Reimer. Reimer operated a photography business called Reimer Studios in Bitburg, Germany. For business reasons, Reimer desired to have photographs developed and printed in the United States. Sturm made the initial contact because his uncle spoke poor English and needed a translator. Brown admitted Sturm told him the uncle operated the business from Germany and that at no time did Sturm indicate he was an employee of Reimer Studios. When Reimer Studios failed to pay monies due on account, Computer Color Lab brought this action against Reimer Studios and Sturm, as agent for Reimer. The trial court granted a default judgment against Reimer Studios when it failed to appear. Computer Color Labs then proceeded against Sturm on an agency theory. The - 3 - parties filed cross motions for summary judgment and the trial court entered judgment in favor of Computer Color Lab, awarding judgment on account along with prejudgment interest of eighteen percent. Pursuant to Civ.R. 56, a motion for summary judgment shall only be granted when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. In reviewing a motion for summary judgment, the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. Temple United, Inc. v. Wean (1977), 50 Ohio St.2d 317. It is a general rule of agency law that in order to avoid personal liability, the agent must disclose to the party with whom he is dealing (1) the agency relationship, and (2) the identity of the principal. Dunn v. Westlake (1991), 61 Ohio St.3d 102, 106; Mark Peterson Dental Laboratory, Inc. v. Kral (1983), 9 Ohio App.3d 163. Pertinent to this action, two situations exist where Sturm, acting as agent, could be found liable for Reimer Studios debt: where the principal is only partially disclosed or where there is a fictitious or non-existent principal, or the principal is without legal capacity or status. James G. Smith & Associates, Inc. v. Everett (1981), 1 Ohio App.3d 118, 120-121. The first basis for imposing liability on Sturm is that he failed to disclose fully the identity of Reimer Studios as his - 4 - principal. The undisputed evidence showed Brown dealt with Hans Reimer for all business transactions. The finished photographs were sent by air express to Germany. Brown sent invoices to Germany and telephoned Reimer Studios and spoke with Hans Reimer when disputes arose concerning the quality of Computer Color Lab's work and its inability to meet deadlines. Reimer Studios paid its invoices from Germany either by wire transfer or third party check. Computer Color Lab argued two facts support a finding that Reimer Studios was a partially disclosed principal: Sturm negotiated the price on Reimer Studios' behalf and Strum once paid a Computer Color Lab invoice from his personal checking account. Sturm did, on behalf of his uncle, initiate contact by telephoning Computer Color Labs. He did so because Hans Reimer spoke very poor English and needed a translator. Brown went to Sturm's house and listened to Sturm describe Reimer Studios' business in Germany and the services it required. When Brown gave an initial price, Sturm replied that price was higher than what Reimer Studios currently paid. Brown left the meeting and later called Sturm, saying he would ,"*** come to their price at that particular time and try it ***." Brown Deposition at 9. In fact, Brown testified at deposition: Q. Were there further price negotiations, other than the first time that Mr. Sturm said to you they are getting a price elsewhere? A. The only other negotiation was when I said that I would do this at this price, you know, and at the price they were paying. (Brown Deposition at 20). - 5 - This uncontradicted testimony shows Sturm had only a passive involvement in arranging the details of the services Computer Color Lab would provide. His input into the price of the services was limited solely to communicating the price Reimer Studios had been paying. The record fails to show Sturm's involvement was so substantial as to render Reimer Studios a partially disclosed principal. Likewise, while Sturm paid one invoice on his uncle's behalf, the uncontradicted evidence showed he did so as a courtesy to his uncle, not as a principal for Reimer Studios. Sturm testified at deposition he paid the invoice because Reimer Studios had not set up a bank account that could handle international wire transfers. Reimer Studios later reimbursed Sturm, but did not pay him any fee for making the payment. Importantly, Sturm gave uncontradicted testimony that Brown initiated Sturm's involvement by going to him and asking if "*** I could get him paid, you know, from Reimer ***." Sturm Deposition at 14 (emphasis added). By asking Sturm to intervene and speak with his uncle, Brown clearly manifested his awareness that Reimer Studios was the principal, and by implication, fully disclosed to him. With these undisputed facts, the trial court erred by finding Reimer Studios was a partially disclosed principal. Computer Color Lab's second basis for imposing liability on Sturm, that Reimer Studios is a fictitious or non-existent principal, rests upon even weaker grounds. Computer Color Labs - 6 - argues Reimer Studios' true identity is not known to any of the parties, particularly in light of Sturm's deposition testimony where he was unable to describe Reimer Studios' legal status. This argument misrepresents the evidence in an attempt to show Reimer Studios is a non-existent principal. At deposition, Sturm was asked, "[w]hat type of entity is Reimer Studios?" He responded, "I don't think so [sic] it's a corporation. I think it's just--I don't know, I think it's just an ownership. I don't have any idea." Sturm Deposition at 9. In no way can Sturm's statement be construed to show Reimer Studios is a fictitious or non-existent principal. Sturm simply did not know whether Reimer Studios was a corporation or a sole proprietorship (assuming those labels even apply under German law). The conclusion that a principal is fictitious does not follow solely because the agent does not know the legal status of his principal's corporate entity. There is no question Computer Color Lab knew it was dealing with a German business entity. Brown testified he personally spoke to Hans Reimer in Germany, received and sent product to Germany, and received payment from Germany by wire transfer or third party check. We fail to see how this continuing course of conduct between Computer Color Lab and Reimer Studios could reasonably form the basis for the argument that Reimer Studios was a fictitious principal. The first and second assignments of error are sustained. - 7 - The third assignment of error concerns the trial court's failure to grant Sturm's motion for attorney fees under R.C. 2323.51. Sturm argues Computer Color Lab engaged in frivolous conduct by bringing this action since it should have been apparent Sturm fully disclosed Reimer Studios as his principal. The trial court did not think Computer Color Lab engaged in frivolous conduct since it entered judgment on the complaint. Although we find that judgment improper, under the circumstances it cannot be said that Computer Color Lab engaged in actions obviously serving to harass or maliciously injure Sturm. The second assignment of error is overruled. Our disposition of the first and second assignments of error necessarily moots consideration of the fourth assignment of error which relates to prejudgment interest. Judgment reversed, final judgment entered for appellants. - 8 - This cause is reversed and remanded to the lower court for further proceedings consistent with this opinion. It is, therefore, considered that said appellants recover of said appellee their costs herein. It is ordered that a special mandate be sent to said court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. DYKE, J. O'DONNELL, J., CONCUR CHIEF JUSTICE JOHN T. PATTON N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journalization, .