Dietrich v. Dobos ( 2014 )

[Cite as Dietrich v. Dobos, 2014-Ohio-4023.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
J. Richard Dietrich, :
Plaintiff-Appellee, :
No. 13AP-1053
v. : (C.P.C. No. 12CV-011863)
David A. Dobos et al., : (REGULAR CALENDAR)
Defendants-Appellants. :
D E C I S I O N
Rendered on September 16, 2014
Organ Cole + Stock LLP, Shawn J. Organ and Erik J. Clark,
for appellee.
Clifford O. Arnebeck, Jr., for appellant.
APPEAL from the Franklin County Court of Common Pleas
KLATT, J.
{¶ 1} Defendant-appellant, David A. Dobos, appeals a judgment of the Franklin
County Court of Common Pleas that granted plaintiff-appellee, J. Richard Dietrich,
default judgment. For the following reasons, we reverse and remand.
{¶ 2} On September 19, 2012, Dietrich filed suit against Dobos, Lora G. Dobos,
and Sheridan Worldwise, Inc. The suit arose from defendants' failure to repay a loan that
Dietrich made to Sheridan Worldwise. The Franklin County Clerk of Courts served all
three defendants with the complaint and summons by certified mail. The delivery receipt
for Dobos' complaint and summons shows that Dobos received the complaint and
No. 13AP-1053 2
summons on September 29, 2012.1 Dobos, therefore, had to answer or otherwise respond
to the complaint by October 29, 2012.
{¶ 3} Of the three defendants, only Lora Dobos answered the complaint.2 When
Sheridan Worldwise failed to timely answer, Dietrich moved for default judgment against
it. Sheridan Worldwise did not respond to the motion. In a judgment dated February 26,
2013, the trial court granted Dietrich default judgment against Sheridan Worldwise and
awarded Dietrich damages in the amount of $150,000, plus post-judgment interest and
costs.
{¶ 4} Dietrich did not also move for default judgment against Dobos, despite his
failure to answer, because Dobos had declared bankruptcy. On October 30, 2012, Dobos
had filed with the trial court a document entitled "Suggestion of Bankruptcy." That
document stated:
1. [Dobos and his attorney] have filed a petition for relief
under Title 11, United States Code, in the United States
Bankruptcy Court for the Southern District of Ohio, which
bears the case number 12-59331.
2. Relief was ordered on October 29, 2012.
3. This action is founded on a claim from which a discharge
would be a release or that seeks to impose a charge on the
property of the estate.
4. This is for informational purposes only, and does not
constitute a notice of appearance by the undersigned
[attorney].
WHEREFORE, the defendant suggests that this action has
been stayed by the operation of 11 U.S.C. § 362.
(Emphasis sic.) (R. 29.)
{¶ 5} Over one year later, on November 7, 2013, Dietrich notified the trial court
that the bankruptcy stay had terminated. Dietrich attached to his notice a bankruptcy
1Dobos maintains that he received the complaint and summons on October 3, 2012. Dobos is mistaken.
The complaint and summons addressed to Sheridan Worldwise, assigned certified item number 7190
0903 0010 0729 4004, was delivered on October 3, 2012. (R. 15, 16, 24.) The complaint and summons
addressed to Dobos, assigned certified item number 7190 0903 0010 0729 4028, was delivered on
September 29, 2012. (R. 18, 23.)
2 In a filing dated February 20, 2013, Dietrich voluntarily dismissed all claims against Lora Dobos.
No. 13AP-1053 3
court order dated November 6, 2013, in which the bankruptcy court ruled that Dobos'
alleged debt to Dietrich was not dischargeable in bankruptcy and had not been
discharged.
{¶ 6} Five days after notifying the trial court of the termination of the stay,
Dietrich moved for default judgment against Dobos. In his motion, Dietrich represented
to the court that neither Dobos nor his attorney had appeared in the action. According to
the certificate of service attached to the motion, Dietrich served Dobos with a copy of the
motion by ordinary mail on November 12, 2013.
{¶ 7} The trial court issued a judgment granting Dietrich's motion on
November 19, 2013. The judgment awarded Dietrich $150,000 in damages, plus post-
judgment interest and costs. Prior to entering default judgment, the trial court did not set
or hold an oral or non-oral hearing.
{¶ 8} Dobos now appeals the November 19, 2013 judgment, and he assigns the
following error:
THE TRIAL COURT BELOW ERRED TO THE PREJUDICE
OF DEFENDANT-APPELLANT DAVID A. DOBOS BY
ENTERING A DEFAULT JUDGMENT AGAINST HIM, ON
THE MOTION OF PLAINTIFF-APPELLEE J. RICHARD
DIETRICH, WITHOUT AFFORDING DOBOS THE NOTICE
AND HEARING REQUIRED BY CIV. R. 55(A).
{¶ 9} A default judgment is a judgment entered against a defendant who has
failed to timely plead or otherwise defend in response to an affirmative pleading. Ohio
Valley Radiology Assoc., Inc. v. Ohio Valley Hosp. Assn., 28 Ohio St. 3d 118, 121 (1986).
If the defendant has failed to appear in an action, a trial court may enter default judgment
without notice. Id. at 120. Conversely, if the defendant has appeared, "the trial court
must, by virtue of Civ.R. 55(A), afford [the defendant] seven days' notice of the hearing on
the motion for default judgment before entering judgment." Id. Compliance with the
seven-day notice requirement is mandatory. Meglan, Meglan & Co., Ltd. v. Bostic, 10th
Dist. No. 05AP-831, 2006-Ohio-2270, ¶ 13.
{¶ 10} Initially, we must address whether Dobos appeared in this action. If Dobos
did not appear, then no notice was necessary.
{¶ 11} Courts, including this one, liberally construe the term "appeared" for the
purpose of applying Civ.R. 55(A)'s notice requirement. GMAC Mtge., LLC v. Lee, 10th
No. 13AP-1053 4
Dist. No. 11AP-796, 2012-Ohio-1157, ¶ 11; Am. Communications of Ohio, Inc. v. Hussein,
10th Dist. No. 11AP-352, 2011-Ohio-6766, ¶ 10; Bostic at ¶ 14. Ordinarily, an appearance
occurs " 'when a party comes into court by some overt act of that party that submits a
presentation to the court.' " State v. Heft, 10th Dist. No. 03AP-211, 2003-Ohio-4893, ¶ 8,
quoting Alliance Group, Inc. v. Rosenfeld, 115 Ohio App. 3d 380, 390 (1st Dist.1996);
accord Hussein at ¶ 10; Bright v. Family Medicine Found., Inc., 10th Dist. No. 05AP-835,
2006-Ohio-5037, ¶ 38. Absent a formal filing, a defendant may "appear" through
informal contacts with the plaintiff or the court that clearly express an intention to defend
the lawsuit. Hussein at ¶ 11; Bostic at ¶ 14; Bright at ¶ 39.
{¶ 12} Here, Dobos filed a "Suggestion of Bankruptcy" with the trial court.
Although that document disclaims that it constitutes an appearance by Dobos' attorney, it
counts as an appearance by Dobos himself. By filing that document with the trial court,
Dobos performed an overt act that submitted a presentation to the court.
{¶ 13} Because Dobos appeared in this action, he was entitled to notice under
Civ.R. 55(A). Dietrich argues that Dobos received that notice when Dietrich served him
with the default judgment motion. Dietrich claims that this notice satisfied Civ.R. 55(A)
because it was served seven days before the trial court decided the motion.
{¶ 14} Dietrich's argument fails because it ignores Civ.R. 55(A)'s mandate that the
notice must be served "at least seven days prior to the hearing" on the default judgment
motion. (Emphasis added.) Civ.R. 55(A). "[W]here the party against whom a motion for
default is directed has appeared in the action, the motion for default may not be heard ex
parte but, instead, can be determined only after a hearing of which seven days' advance
notice is given." (Emphasis sic.) Breeding v. Herberger, 81 Ohio App. 3d 419, 422 (10th
Dist.1992); accord Pickett v. Katz & Co. Salon, 9th Dist. No. 25851, 2011-Ohio-4396, ¶ 4
(quoting and following Breeding). Consequently, compliance with Civ.R. 55(A) hinges
upon an appearing defendant receiving both a hearing and prior notice of that hearing.
CitiMtge., Inc. v. Fangman, 12th Dist. No. CA 2013-03-020, 2013-Ohio-3316, ¶ 9
(" 'Civ.R. 55(A) clearly requires that before it enters a default judgment against a
defendant who has appeared, a trial court must hold a hearing and provide the defendant
with seven days' notice of the hearing on the motion for default judgment.' "); Plant
Equip., Inc. v. Nationwide Control Serv., Inc., 155 Ohio App. 3d 46, 2003-Ohio-5395, ¶ 10
No. 13AP-1053 5
(1st Dist.) ("The plain language of Civ.R. 55(A) requires a hearing and that an appearing
defendant be given notice of the date of the hearing that will impose liability on that
defendant."); State Farm Ins. Co. v. Valentino, 7th Dist. No. 02-CA-119, 2003-Ohio-3487,
¶ 26 (holding that the trial court could not enter default judgment because it never held a
hearing on the default judgment motion or gave the appearing defendant seven days'
notice of the hearing); In re Forfeiture of $1952.00 U.S. Currency, 10th Dist. No. 93AP-
957 (Nov. 16, 1993) (holding that service of the default judgment motion on the
defendant, who had appeared, was inadequate notice under Civ.R. 55(A) because the
motion did not include the date of the default judgment hearing).
{¶ 15} Previously, the Local Rules of the Franklin County Court of Common Pleas
automatically set a non-oral hearing date for the 28th day after the filing of a default
judgment motion, if no party requested an oral hearing. Loc.R. 21.01; Bank of New York
Mellon v. Watkins, 10th Dist. No. 11AP-539, 2012-Ohio-4410, ¶ 13. A defendant could
calculate the non-oral hearing date by counting 28 days from the date on which the
plaintiff filed the default judgment motion. Thus, service of the default judgment motion
on the defendant, in combination with Loc.R. 21.01, provided the necessary notice of both
the default judgment motion and the non-oral hearing date. Scarefactory, Inc. v. D & B
Imports, Ltd., 10th Dist. No. 01AP-607 (Jan. 3, 2002).
{¶ 16} However, in 2012, the Franklin County Court of Common Pleas rewrote its
local rule governing default judgments. Loc.R. 55.03 now states that the "non-oral
hearing procedure in Loc.R. 21.01 do[es] not apply to default judgment motions."
Consequently, plaintiffs can no longer rely on Loc.R. 21.01 to set an automatic non-oral
hearing and provide the defendant with notice of that hearing. Rather, when the
defendant has appeared in the action, the plaintiff must ensure that the trial court
schedules a default judgment hearing.3 Additionally, at least seven days prior to the
hearing, the defendant must be served with or otherwise notified of the default judgment
motion and be informed of the date of the hearing.
{¶ 17} Here, the trial court failed to set or hold a hearing on Dietrich's default
judgment motion. Given Dietrich's representation that Dobos had not appeared, the trial
3We note that nothing in Civ.R. 55(A) specifies the type of hearing that the trial court must schedule.
The hearing, therefore, may be either oral or non-oral.
No. 13AP-1053 6
court may have believed that a hearing was unnecessary. However, as we have
determined that Dobos appeared in this action, we conclude that the trial court erred by
entering default judgment against Dobos without setting a hearing and providing Dobos
with notice of the hearing.
{¶ 18} For the foregoing reasons, we sustain Dobos' assignment of error, and we
remand this matter to the Franklin County Court of Common Pleas for further
proceedings consistent with law and this decision.
Judgment reversed; cause remanded.
DORRIAN and LUPER SCHUSTER, JJ., concur.