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r^. , , f^- ^ ^:^lf^dtR^^ ^1 ^ ; ^`^s^",^^ .'^^^ IN THE SUPREME COURT OF OHIO Case No: ENQTJI:P T:ECH1`+1OI1OGIES GROUP INCORPORATED, On Appeal from the Appellant, . Greene County • Court of Appeals, V. Second Appellate District TYCON TECHNOGLASS S.r.l., and • Court of Appeals ROI313INS & MYERS, INC., • Case No. 2011-CA-39 Appeliees. MEMORANDUM IN SUPPORT OF JURISDICTION OF APPELLANT, ENQUIP TECHNOLOGIES G-ROUP INCORPORATED John B. Pinney (00 18173) (Counsel of Record) Kara A. Czanik (0075165) Graydon Head & Ritchey LLP 1900 Fiftli Third Center; 511 Walnut Street Cincinnati, OH 45202 513-621-6464 I'`,o t^6 €`) Fax 513-651-3836 J pinney^^graydon.c6m CLERK OF C^UIRT kczanik@gr aydon.com SUPREME OURT'M'_ Coutisel for Appellant, EnQuip Technologies Group Incorporated Christine M. Haaker (0063225) Matthew E. Liebson (0071544) Terry W. Posey, Jr. (0078292) Thompson Hine LLP Thornpson Hine LLP 3900 Key Center Austin Landing I 3900 Key Center 10050 Innovation Drive, Suite 400 Cleveland, OH 44114 Dayton, OI-[ 45342 216-566-5500 937-443-6822 Fax 216-566-5800 Fax 937-443-6635 matthew.liebson a;thompsonhine.com chri stine. haaker,ci,thompsonhine. com terry.po sey@thompsonhine. c om Counsel for Appellees, Tycon 'Teclmo,glass S.r.l. and Robbins & Myers, Inc. TABLE OF CONTENTS Pa-e I. Explanation of Why this Case is a Case of Public or Great General Interest..... 1 II. Statement of the Case and Facts .............................................,....>.......... .....,......... 4 III. Argument_in Support of Propositions of Law ........................................................ 6 Proposition of Law No. l-- R.C. 1335.11(C) establishes a statutory cause of action for unpaid commissions by a terminated sales representative against a principal that is supplemental to any cause of action for breach of contract. ............. 6 Proposition of Law No. 2 - An Ohio court that has personal jurisdiction over the principal must apply R.C. 1335.11 to a claim by a terniinated sales representative for unpaid commissions brought under that statute even where the parties' agreement provides that the contract is governed by the law of another state. .......... 9 Frooosition of Law No. 3 - The violation of a statutory mandate under Ohio law constitutes an "illegal act" that satisfies the second prong of the Belvedere%Dombroski test and subjects a parent corporation causing such violation to potential liability as its subsidiary's alter ego . ........................................ 11 Proposition of Law No. 4 - When a parent corporation directly participates in its subsidiary's violation of a statute resulting in plaintiff s injury, the parent may be held jointly directly liable, along with the subsidiary, for the plaintiffs damages caused by its being a "direct participant" in the subsidiary's wrongful act ................ 12 Proposition of Law No. 5- Whether a forum selection clause is permissive or mandatory should be determined according to the plain meaning of its language pursuant to the rules and procedures applicable in the court before which the case is pendi ng. ..... ..... ................... .. ..... .. ... .... ........ ..... ...... ....... ...... .... ... ......... ........ 13 Proposition of Law No. 6 - Ohio public policy under R.C. 1335.11(p)(3) prohibits enforcement of a mandatory forum clause in a contract between a sales representative and a principal where the designated coYart is outside of Ohio............ 15 IV. Conclusion .... ........ .... ................................................................ ....... ...... 15 Certificate of Service ............................... ......... ................... ......... .., ..................... 16 Appendix Appx. Page Opinion of Greene County Court of Appeals (Dec. 28, 2012)... ... ... ........ ...... 1 Final Entry of Greene Countv Court of Appeals (Dec. 28, 2012)...... .................... 32 Decision and Entry of Greene County Court of Appeals (July 18, 2013) ............... 35 Memorandum and Order of Greene County Common Pleas Court (Feb. 17, 2009)... 48 Order Denying Defendant's Motion to Dismiss (April 23, 2009)...... ...... ...... ......127 Order on Reconsideration of Greene County Common Pleas Court (Mar. 12, 2010)..153 MEMORANDUM IN SUPPORT OF JURISDICTION OF APPELLANT, ENQUIP TECHNOLOGIES GROUP INCORPORATED 1. Explanation of Why This Case Is a Case of Public or Great General Interest. EnQuip Technologies Group Incorporated ("EnQuip") brings three issues embodied in six propositions of law to this Court. Each involves a question of first impression that represents a matter of public or great general interest. The lack of definitive Ohio precedent on each issue is what largely has led to over five years ofintense litigation in this case without a final result. The first issue involves the interpretation of R.C. 1335.11 (referred to herein as the"GQhio Sales Representative Protection Act" or the "Act") which creates a statutory cause ofaetion for commissioned sales representatives who are terminated and then not paid the commissions owed by their principal. This Court has never taken a case involving the Act. The Act was originally enacted in 1988 to insure that terminated sales representatives would actually receive what was owed. The Act was then revised in 1999 to eliminate references to the parties' residency in order to comply with the requirements of the commerce clause in the United States Constitution. Both the trial court and the appellate court below seriously misconstrued the Act by failing to give effect to its division (F)(2), a provision that voids application of any other state's law to claims brought under the Act. The court of appeals' Opinion also refused to recognize the Act's supplemental statutory cause of action at division (C) requiring "a principal to pay the sales representative all commissions due the sales representative" after termination. Instead of recognizing a cause of action under division (C), the court of appeals concluded that the purpose of the statute was only to create a claim, per division (D).. for exemplary damages, plus attorney's fees and court costs, against principals who willfully failed to pay the commissions due. These misinterpretations of the Act alone justify review of this case by the Supreme Court. The second important question of first impression in this appeal addresses whether a - 1 - parent corporation can be held liable for the unlawful conduct of its subsidiary based on the subsidiary's violation of an express statutory duty under either an alter ego theory or a "direct participant" liability theory. flere, based on overwhelming evidence, the jury at trial specifically found under proper instructions that defendant-appellee Robbins & Myers, Inc. ("R&M") was the alter ego of its subsidiary, defendant-appellee Tycon 'Technoglass S.H. ("TyTg"). By that finding, the jury necessarily had to conclude that TyTg "had no separate mind, will, or existence of its own" and that EnQuip's damages resulted "from such control" being exercised by R&M., By granting R&M's post-trial JNOV motion, the trial court threw out EnQuip's verdict against R&M. In doing so, the trial court concluded that TyTg's violation of the directive under the Italian Civil Code that requires principals to pay the commissions owed to their sales agents was not a sufficient "illegal act" to meet the second prong of the BelvederelDombroski test. In rejecting EnQuip's R.C. 1335.11 claim altogether, both the trial court and the appeals court never reached the issue of whether TyTg's non-payment of commissions in violation of the Ohio Act was an "illegal act" that satisfied the second prong of the Belvederre/Dornbroski alter ego test. Similarly, neither the trial court nor the court of appeals reached the merits of EnQuip's "direct participant" theory of liability, which if adopted in Ohio would also support R&M's joint liability with TvTg.2 Nonetheless, the jury's findings on the first and third prongs of the i The jury was properly instructed regarding the three essential elements for alter ego liability under the 13elvederE!Dornbroski test: "(1) R&M exercised such control that was so complete that Tvcon had no separate mind, will or existence of its own; (2) R&M's control over Tycon was exercised in such a manner as to comnlit an illegal act against EnQuip; and (3) EnQuip incurred a loss that resulted from such control or similar illegal act." Belvedere Condo. ZlnitOtit'netas' Assn. v. R.E. Roark Cos., Inc. 67 Ohio St. 3d 274, 617 N.E.2d 1075 (1993), and Dombroski v. II'ellpoint, Inc., 119 Ohio St. 3d 506, 2008-Ohio-4827, 895 N.E.2d 538. 2'I'he court of appeals erroneously stated that EnQuip had apparently "dropped" its direct participant theory of liability against R&M (July 18, 2013 Decision, fn. 6). That conclusion is neither accurate nor supported by the record. In fact, EnQuip specifically argued for application of the "direct participant" theory in its Memorandum of Relevant Law, pp. 6-7, filed on March 2, (Continued) -2- Beli'eder-e/17nmbr^oski test support fully R&M's liability under EnQuip's direct participant theory. The issue of R&M's liability as either alter ego or as direct participant is also certainly worthy of review by this Court, especially where, as here, R&M's liability relates importantly to the nexus between EnQuip's claims and Ohio and to whether RC. 1335.11 should apply at all. Finally, the third distinct matter of first impression presented on this appeal is how an Ohio court should interpret a forum selection clause to determine whether a specified forum is exclusive and thus mandatory or whether it is merely permissive. The clause in the parties' contract in this case reads: "[t]heiaw court in Venice will be competent for any disputes." The trial court held that this unambiguous language, written in English, was permissive and thus non- mandatory and, as such, did not vest exclusive jurisdiction with the Italian court to decide the case. The court of appeals, however, reversed and held that a European Union regulation should be read into the language used in the clause and, by doing so, interpreted the forum clause so as to require all of EnQuip's claims to be brought exclusively before the Italian court.