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Promotion Co. v. Sweeney - 2002-Ohio-6711, 150 Ohio App. 3d 471, 782 N.E.2d 117

Rule:

When the alleged error in the denial of summary judgment is based purely on a question of law that must be answered without regards to issues of fact, then the denial of summary judgment is reviewable. 

Facts:

Defendant Douglas Sweeney was the president of defendant State Chevrolet, Inc., an automobile dealership located in Youngstown, Ohio. Plaintiff, The Promotion Company, Inc., is an Indiana corporation, which was the promoter of the 1998, 1999, and 2000 Hot Rod Super Nationals. The contract used the name "State Chevrolet" many times throughout, never adding Inc. to the end of the name. All clauses referring to obligations and rights named State Chevrolet as the obligor or obligee, never naming Sweeney personally. The Promotion Company filed a breach of contract suit against Sweeney dba State Chevrolet. Sweeney's answer defended by claiming that he executed the agreement as an agent for the disclosed principal of State Chevrolet, Inc., thus Sweeney claimed he was not personally liable and/or Plaintiff failed to join all necessary parties. Plaintiff filed a motion for summary judgment. The motion argued there is no evidence that "State Chevrolet" exists as a corporate entity and there is no dispute that a contract was signed and breached, pointing to Sweeney's deposition.

Issue:

Did the failure to place "Inc." after a corporate name in a contract violate Ohio corporation law such that it precluded the defense of agency and allowed the president to be sued, since he signed on behalf of the company? 

Answer:

No

Conclusion:

The appellate court applied Ohio law to procedural issues, and Indiana law to the interpretation of the contract. Under Ohio law, the failure to use "Inc." did not per se rest liability in the principal. Further, the user of the fictitious name was not necessarily the president. Under Indiana law, the president could not be sued, as the contract provided a business name throughout. The omission of "Inc." did not make the principal undisclosed. There was a genuine issue of material fact as to the intent of the parties on the issue of personal liability where: (1) the president was not the drafter; (2) the corporation was referred to as its common fictitious name; (3) the contract was between the promoter and the corporation; (4) there was no desire to hide the existence of the corporation; and (5) a business address was listed, rather than the president's residential address, after his signature, under which the corporate name was typed.

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