COURT OF APPEALS OF OHIO EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 73459 MICHAEL FRATE D.B.A. EMPIRICAL SOUND : : JOURNAL ENTRY Plaintiff-Appellee : : AND vs. : : OPINION AL-SOL, INC. : D.B.A. THE EDGE, ET AL. : : Defendant-Appellants : : DATE OF ANNOUNCEMENT OF DECISION: NOVEMBER 19, 1998 CHARACTER OF PROCEEDING: Civil appeal from the Court of Common Pleas Case No. CV-300429 JUDGMENT: AFFIRMED IN PART AND REVERSED IN PART. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellee: DAVID G. FINLEY 25 W. Prospect Avenue #704-R Cleveland, Ohio 44115 For Defendant-Appellants: MARLENE N. LALLY 2351 North Park Boulevard Cleveland Heights, Ohio 44106 For Co-Defendant-Appellee: BRIAN C. CRUSE Coltman & Valore Co. 21055 Lorain Road Fairview Park, Ohio 44126 -2- TERRENCE O'DONNELL, PRESIDING JUDGE: Al-Sol, Inc., d.b.a. The Edge night club, Alex Solomon, and A & E Investment Company appeal from a $19,336 court of common pleas court judgment entered pursuant to a bench trial verdict in favor of Michael Frate, d.b.a., Empirical Sound. The record reveals a rather unfortunate circumstance involving Michael Frate. Here, the record reveals that Frate, d.b.a. Empirical Sound, leased certain lighting and sound equipment to The Edge nightclub which, at the time, Donald Kollecker operated under a purchase management agreement. Denise Savastano, Kollecker's sister, and Eric Buckner, employees of The Edge, signed the lease for the equipment. At the time, Alex Solomon owned the nightclub and did business under the names of Al-Sol, Inc. and A & E Investment Co. Because Kollecker failed to make payments on the management agreement, Solomon locked him out and refused to return Frate's equipment or pay Frate for the rental. Accordingly, Frate sued Solomon, Al-Sol, Inc. and A & E Investment Co. for conversion, and subsequently joined Savastano and Buckner on a breach of contract claim. At trial, Frate recovered a $19,336 joint and several judgment against all defendants; subsequently, the court granted judgment in favor of Savastano on her indemnity cross-claim against all defendants and the court thereafter awarded $4,000 in attorney fees against Solomon, Al-Sol and A & E. Appellants, Solomon, Al-Sol, Inc. and A & E Investment Co., now appeal and raise three assignments of error for our review. The first assignment of error states: -3- I. THE TRIAL COURT COMMITTED PREJUDICIAL ERROR BY PERMITTING PLAINTIFF TO MAINTAIN AN ACTION BASED ON CLAIMS OF AN UNREGISTERED TRADE NAME OR FICTITIOUS ENTITY OVER THE OBJECTIONS AND AFFIRMATIVE DEFENSE OF DEFENDANTS- APPELLANTS. The appellants assert that because Michael Frate did business as Empirical Sound but failed to register that trade name with the Secretary of State, no action may be maintained in the name of Empirical Sound. In Buckeye Foods v. Cuyahoga Cty. Bd. of Revision (1997), 78 Ohio St.3d 459, the court held that a person doing business under an unregistered fictitious trade name lacks the legal capacity to sue. However, the court there noted at 462: Buckeye Foods also argues that Eanes is the real party in interest, since he owns an interest in these corporations and is a franchisee for three of the properties. We reject this contention. The complaint does not list Eanes as the complainant; his name appears as the person in the care of which the complainant's mail is to be sent. According to Webster's Third New International Dictionary (1986) 338, the word care means CUSTODY: temporary charge--used esp. in the phrase care of or in care of on mail sent to a person through another person or other agency * * * abbr. c/o. (Emphasis sic.) Since Eanes is the person to whom the mail for Buckeye Foods is to be sent, he is not the complainant. The court then stated: Accordingly, since Buckeye Foods is a fictitious name that has no capacity to litigate these complaints, it is not the party affected by these complaints. We, thus, affirm the BTA's dismissal of the complaints. Our examination of the complaint filed in this case reveals the case had been brought in the name of Michael Frate, dba Empirical Sound (Emphasisadded.) Hence, the statutory prohibition of R.C. 1329.01 precluding a sole proprietor from bringing a suit -4- in the name of an unregistered factitious trade name does not apply because Michael Frate has sued in his own name and he is permitted to do so. Every corporate lawyer, business law student, businessman, and CPA recognizes that a person doing business as a sole proprietor need not incorporate in order to do business. The statutory prohibition of R.C. 1329.10 is designed to preclude a sole proprietor from bringing suit in the fictitious business name which necessarily shields the real party in interest from disclosure. Nothing, however, contained in that statute precludes an individual from filing suit in his own name as Frate has done here. Rather, he has made full disclosure of his identity in a legitimate effort to recover his own property from Al-Sol, Inc. whom he claimed converted it and to recover on his breach of contract claim against the other defendants for not paying him amounts he claimed due on his lease of that equipment to The Edge nightclub. Accordingly, Frate has sued in his own name and made a full disclosure of his business identity, therefore this assignment of error is not well taken and it is overruled. II. THE TRIAL COURT COMMITTED PREJUDICIAL ERROR BY AWARDING DAMAGES BASED ON A CONTRACT TO WHICH DEFENDANTS- APPELLANTS WERE NOT A PARTY. The second assignment of error alleges trial court error in awarding judgment against appellants, who were not parties to the contract. A brief cursory review of the complaint, however, reveals that Frate also presented a conversion claim and that -5- appellants have at all relevant times kept Frate from obtaining his own equipment. Accordingly, this assignment of error is not well taken. III. The third assignment of error alleges court error in granting indemnity to Savastano as to A & E Investment Co. and Alex Solomon because she did not seek this relief against these parties. A review of the pleadings and the transcript reveals that this issue had not been raised in the trial court and despite specific requests for judgment against Mr. Solomon. In Stores Realty Co. v. Cleveland (1975), 41 Ohio St.2d 41, the court stated in relevant part at 43: Ordinarily, errors which arise during the course of a trial, which are not brought to the attention of the court by objection or otherwise, are waived and may not be raised upon appeal. However, regarding A & E Investment Co., the record reflects neither a request for judgment nor a waiver as to this appellant. Accordingly, the assignment of error is well taken as to A & E Investment Co. Accordingly, the judgment of the trial court is affirmed in all respects, but the indemnity judgment entered in favor of Savastano is reversed. Judgment accordingly. -6- It is ordered that appellee recover of appellants costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Court of Common Pleas 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. LEO M. SPELLACY, J., CONCURS; JAMES D. SWEENEY, J., DISSENTS (See Dissenting Opinion attached) PRESIDING JUDGE TERRENCE O'DONNELL N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the clerk per App.R. 22(E). See, also S.Ct.Prac.R. II, Section 2(A)(a). COURT OF APPEALS OF OHIO EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 73459 MICHAEL FRATE : D.B.A. EMPIRICAL SOUND : : D I S S E N T I N G Plaintiff-Appellee : : O P I N I O N vs. : : AL-SOL, INC. : D.B.A. THE EDGE, ET AL. : : Defendant-appellants : : DATE: NOVEMBER 19, 1998 SWEENEY, JAMES D., J., DISSENTING: I must respectfully dissent from the majority opinion. This matter is before this court upon the appeal of Defendants-appellants Al-Sol, Inc., dba The Edge Night Club; A & E Investment Company dba The Edge Night Club; and Alex Solomon, who appeal from the rendering of a verdict in favor of the plaintiff- appellee Michael Frate dba Empirical Sound. In the first assignment of error, the appellants argue that the appellee was improperly permitted to maintain an action in contravention of R.C. 1239.01, which requires business entities using a trade or fictitious name to register or report to the Secretary of State. The appellants assert that R.C. 1329.10 states that an entity who has failed to register a trade name or fictitious name with the Secretary of State may not maintain or commence an action in the trade name or fictitious name of the entity. The appellee does not assert that he has, at any time, -2- attempted to comply with the demands of R.C. 1239.01 and R.C. 1329.10. The statute crucial to the determination of the appellee's standing to bring suit is R.C. 1329.10(B), which states: (B) No person doing business under a trade name or fictitious name shall commence or maintain an action in the trade name or fictitious name in any court in this state or an account of any contracts made or transactions had in the trade name or fictitious name until it has first complied with section 1329.01 of the Revised Code and, if the person is a partnership, it has complied with section 1777.02 of the Revised Code, but upon compliance, such an action may be commenced or maintained on any contracts and transactions entered it prior to compliance. In Ebner v. Caudill (1994), 93 Ohio App.3d 785, the Franklin County Court of Appeals held that The plain language of the statute precluded any person using a fictitious name from commencing or maintaining an action based upon use of the fictitious name unless he has first registered that name with the Secretary of State pursuant to R.C. 1329.01." More importantly, the Supreme Court has recently held that a person places himself in a precarious position when he operates under a fictitious name. Buckeye Foods v. Cuyahoga Cty. Bd. Of Revision (1997), 78 Ohio St.3d 459. A person doing business under an unregistered, fictitious name lacks the legal capacity to sue. Id. at 461, citing to GMS Mgt. Co. v. Axe (1982), 5 Ohio Misc.2d 1, 8; Thomas v. Columbus (1987), 39 Ohio App.3d 53, 55-56. The purpose for reporting or registering a fictitious or trade name is so that it is easier for the public to determine with whom it is doing business. See Millard, Fictitious Name Reporting (Aug. 14, 1978), -3- 51 Ohio Bar 1003, an article written shortly after the legislature enacted R.C. 1329.01. The plain language of the statute requires that a person doing business under a trade or fictitious name shall not be permitted to maintain an action in that trade or fictitious name. Here, each of the three contracts attached to the complaint: 1) are captioned in the name of Empirical Sound; 2) state that the equipment had been received and rented from Empirical Sound; and, 3) repeat the name Empirical Sound next to signature line. The name of Michael Frate is not to be found on these contracts. Thus, the appellee was doing business as the entity Empirical Sound, and the parties attempting to do business with the appellee at the time of the transaction would have been unable to determine with whom they were doing business from the face of the contract. This is the specific type of conduct the statute was enacted to prohibit. The majority in the case sub judice asserts that Michael Frate dba Empirical Sound denotes an entity which has not filed an action using a fictitious or trade name, but rather denotes a person filing an action in his own name. The majority seeks to separate Michael Frate from Empirical Sound, a course of action which was open to the appellee when the action was filed and one he chose not to follow. Permitting a litigant to bring an action by using a given name dba a business name would clearly permit circumvention of the statute. Additionally, while not directly speaking to the issue of whether or not a tort action may be maintained by a plaintiff using -4- a fictitious name or trade name, in Benefit Management Consultants, Inc. v. Gencorp, Inc. (May 22, 1996), Summit County App. No. 17488, unreported, the court prohibited the plaintiff, who failed to comply with R.C. 1329.01 and R.C. 1329.10, from proceeding on an action for breach of an oral contract, quantum meruit, and fraud. Similarly, in New Method Textiles, Inc. v. TGI Friday's, Inc. dba Friday's Restaurant (June 28, 1994), Franklin County App. No. 93APG10-1360, unreported,the court upheld a dismissal of an action on an account and for conversion where the plaintiff failed to comply with R.C. 1329.01(B). Given these Ohio cases, I am unpersuaded by the appellee's reliance upon Thompson v. Byers (1931), 116 Cal. App. 214 and Maxwell v. Pierce (1937), 183 Ga. 856. In light of the plain language of R.C. 1329.10 and Ohio Supreme Court's unequivocal pronouncement that one doing business under an unregistered name lacks the capacity to bring an action, .