John Soliday Fin. Group, L.L.C. v. Moncreace , 2011 Ohio 1471 ( 2011 )

[Cite as John Soliday Fin. Group, L.L.C. v. Moncreace, 2011-Ohio-1471.]
STATE OF OHIO, JEFFERSON COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
JOHN SOLIDAY FINANCIAL ) CASE NO. 09 JE 11
GROUP, LLC )
)
PLAINTIFF-APPELLANT )
)
VS. ) OPINION
)
ANGEL MONCREACE )
)
DEFENDANT-APPELLEE )
CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common
Pleas of Jefferson County, Ohio
Case No. 08 CV 308
JUDGMENT: Reversed.
Default Judgment Reinstated.
APPEARANCES:
For Plaintiff-Appellant: Atty. Jackson T. Moyer
Cheek Law Offices, LLC
471 E. Broad Street, 12th Floor
Columbus, Ohio 43215
For Defendant-Appellee: Atty. Thomas E. Zani
Southeastern Ohio Legal
Services Program
100 N. Third Street
Steubenville, Ohio 43952
JUDGES:
Hon. Cheryl L. Waite
Hon. Joseph J. Vukovich
Hon. Mary DeGenaro
Dated: March 22, 2011
WAITE, P.J.
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{1} This case originated as an action by a financial institution to recover
money damages on an unpaid consumer auto loan. Appellee Angel Moncreace
borrowed money in 2004 in Steubenville, Ohio, to purchase a used car. The auto
loan was in the amount of $7,996.55. Appellee failed to make payments on the loan,
and Appellant John Soliday Financial Group, LLC (“Soliday”) filed an action in the
Jefferson County Court of Common Pleas to recover the outstanding amount of the
loan. Appellee did not respond to the complaint, and Soliday was awarded a default
judgment. Appellee subsequently obtained counsel and filed a Civ.R. 60(B) motion
for relief from judgment. The trial court granted the motion, and Soliday is now
appealing that ruling.
{2} This case is governed by GTE Automatic Elec., Inc. v. Arc Industries,
Inc. (1976), 47 Ohio St.2d 146, 351 N.E.2d 113, which requires a party to establish
three things in order to obtain relief from judgment: 1) a meritorious defense; 2) an
entitlement to relief under one of the grounds stated in Civ.R. 60(B)(1)-(5); and 3)
timeliness of the motion. Appellee’s ground for relief was that she had excusable
neglect for failing to respond to the complaint because she was not an attorney and
did not know of various potential defenses to the complaint until after she hired an
attorney to pursue relief from judgment. This rationale amounts to mere inaction on
receipt of a civil complaint, and actually evinces a complete disregard of the legal
system. Such action does not constitute an acceptable form of excusable neglect.
The trial court erred in granting the Civ.R. 60(B) motion, and the judgment of the trial
court is reversed.
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Background
{3} On October 14, 2004, Appellee purchased a 1997 Chrysler Cirrus from
ProCar Auto Group in Steubenville. She signed a retail installment credit contract
with Atlantic Financial Services, Inc., with a principal amount of $7,996.55, plus
interest at a rate of 24.95% per annum. She was required to make payments every
two weeks in the amount of $147.87. Appellee failed to make payments on the loan,
and Soliday, claiming to be the assignee of the loan, filed suit to collect the debt.
{4} The breach of contract complaint was filed on May 23, 2008. Appellee
did not respond to the complaint. On August 1, 2008, Soliday filed a motion for
default judgment in the amount of $4,653.91 plus interest in the amount of $1,891.03
through July 25, 2008, and future interest to accrue at 24.95% per annum. The court
scheduled a hearing for September 15, 2008, and sent notice to the parties. Again,
Appellee failed to respond in any way and failed to attend the hearing. The trial court
granted the motion on December 30, 2008, and entered judgment as Soliday had
requested, approximately seven months after the complaint was filed. No appeal
was taken of this judgment entry by Appellee.
{5} A certificate of judgment lien against land and tenements was entered
on January 12, 2009.
{6} Appellee subsequently obtained counsel, and on February 17, 2009,
she filed a Civ.R. 60(B) motion for relief from judgment. The motion alleged that
Appellee did not know what to do when she received the complaint and that this
inaction constituted excusable neglect. The motion also presented a number of
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possible defenses to the action, including Soliday’s failure to prove the assignment of
the loan, failure to attach a copy of the delinquent account to the complaint, failure to
provide proper notice of repossession, and failure to act in a commercially
reasonable manner. The motion did not allege that Appellee failed to receive the
complaint or failed to receive any other court notice or document.
{7} On March 9, 2009, Soliday filed a memorandum contra defendant’s
motion for relief from judgment. Soliday argued that Appellee was required to
establish excusable neglect, a meritorious defense, and timeliness of the motion, in
order for the court to grant the motion. Soliday argued that Appellee simply ignored
the complaint. Inaction is not a legally acceptable form of excusable neglect. Soliday
also argued that the motion was untimely and that no meritorious defense was
established.
{8} Appellee filed a further reply on March 12, 2009. The court held a
hearing on the motion on March 16, 2009. Most of the hearing dealt with whether
Appellee had any meritorious defenses. Soliday presented little challenge to the
alleged defenses, but did emphasize that, as a threshold matter, Appellee presented
no excusable neglect because Appellee simply ignored the complaint, as well as all
the other court filings. (Tr., p. 3.) Appellee’s counsel argued that Appellant did not
know of the possible legal defenses she might have had because she was not a
lawyer, and did not realize her car could be repossessed simply by failing to pay her
loan installments. (Tr., pp. 6-7.) She supposedly understood her possible defenses
only after she obtained counsel. The trial court appears to have accepted this
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reasoning as excusable neglect and granted the motion for relief from judgment on
March 18, 2009. This timely appeal followed.
ASSIGNMENT OF ERROR
{9} “The trial court abused its discretion by holding that Appellee’s failure to
appear or answer Appellant’s complaint was ‘excusable neglect’ that entitled
Appellee to relief from judgment pursuant to Rule 60(B) of the Ohio Rules of Civil
Procedure.”
{10} Soliday contends that the trial court should not have granted Appellee’s
motion for relief from judgment because she did not establish excusable neglect for
failing to defend against the complaint. The law surrounding Civ.R. 60(B) motions is
clear and is correctly cited by both parties. Civ.R. 60(B) is remedial and should be
liberally construed so the ends of justice may be served. Kay v. Marc Glassman, Inc.
(1996), 76 Ohio St.3d 18, 20, 665 N.E.2d 1102. To prevail upon a Civ.R. 60(B)
motion, the movant must demonstrate: 1) a meritorious defense or claim to present if
relief is granted; 2) the movant is entitled to relief under one of the grounds stated in
Civ.R. 60(B)(1) through (5); and 3) the motion is made within a reasonable time, and,
where the grounds of relief are Civ.R. 60(B)(1), (2) or (3), not more than one year
after the judgment, order or proceeding was entered or taken. GTE Automatic Elec.,
Inc. v. ARC Industries, Inc. (1976), 47 Ohio St.2d 146, 351 N.E.2d 113, paragraph
two of the syllabus. “These requirements are independent and in the conjunctive;
thus the test is not fulfilled if any one of the requirements is not met.” Strack v. Pelton
(1994), 70 Ohio St.3d 172, 174, 637 N.E.2d 914.
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{11} “Civ.R. 60(B) may not be used as a substitute for appeal.” Doe v.
Trumbull Cty. Children Servs. Bd. (1986), 28 Ohio St.3d 128, 131, 502 N.E.2d 605.
The movant's arguments must not merely reiterate arguments concerning the merits
of the case that could have been raised on appeal. Manigault v. Ford Motor Co.
(1999), 134 Ohio App.3d 402, 412, 731 N.E.2d 236.
{12} When reviewing a trial court's decision regarding a Civ.R. 60(B) motion
for relief from judgment, that decision will not be reversed unless the trial court
abuses its discretion. Strack at 174. The term “abuse of discretion” constitutes more
than an error of judgment; it implies the trial court acted unreasonably, arbitrarily, or
unconscionably. Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219, 450 N.E.2d
1140.
{13} In this appeal, Soliday is not challenging whether Appellee may have
had a possible meritorious defense or that her motion for relief from judgment was
timely filed. The sole issue on appeal is whether the trial court abused its discretion
when it concluded that Appellee’s failure to respond to the complaint was the result of
excusable neglect.
{14} The determination of whether a particular failure is excusable neglect
“must be made from all the individual facts and circumstances in each case.”
D.G.M., Inc. v. Cremeans Concrete & Supply Co., Inc. (1996), 111 Ohio App.3d 134,
138, 675 N.E.2d 1263. The Ohio Supreme Court has articulated that neglect is not
excusable if it is an act of complete disregard for the judicial system. Kay, supra, at
20. Excusable neglect is not present if the party could have prevented the
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circumstances from occurring. Vanest v. Pillsbury Co. (1997), 124 Ohio App.3d 525,
706 N.E.2d 825. “[C]ourts must not let Civ.R. 60(B) serve as an emasculation of the
pleading rules and time limits.” Fifth Third Bank v. Perry, 7th Dist. No. 03MA100,
2004-Ohio-1543, ¶12.
{15} The instant case is similar to the situation that occurred in Associated
Estates, Corp. v. Fellows (1983), 11 Ohio App.3d 112, 463 N.E.2d 417. In
Associated Estates, Corp., the defendant failed to plead or respond in any way to the
complaint despite his admitted receipt of the complaint. The complaint was for
unpaid rent. After the defendant received the complaint, he simply waited to see
what would happen next instead of answering the complaint. He claimed that he did
not appreciate the significance of the court documents and did nothing. The Eighth
District Court of Appeals overruled appellant's claims, stating that “[t]he neglect of an
individual to seek legal assistance after being served with court papers is not
excusable.” Id. at 116, 463 N.E.2d 417.
{16} This Court itself has held that “[a] party who is informed of court action
against him and fails to seek legal assistance does so at his risk and such conduct
cannot be said to constitute ‘excusable neglect’ under Civ.R. 60(B)(1) or (5) unless a
compelling reason is presented, like a serious illness.” Yuhanick v. Cooper (Nov. 16,
1998), 7th Dist. No. 96-CO-45, *5.
{17} Similar cases can be found in nearly every appellate district. Equilease
Corp. v. Thompson (July 6, 1978), 8th Dist. No. 37510 (defendant's failure to answer
because of an upcoming vacation is not excusable); Tom Sweeney, Inc. v. Porter
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(April 30, 1999), 1st Dist. No. C-980337 (failure to seek counsel because it would be
expensive is not excusable neglect); Wilson v. Patel (Feb. 1, 1995), 2d Dist. No.
14634 (it was not excusable neglect for defendant to fail to answer the civil complaint
for battery simply because he thought he was not civilly liable after he had been
absolved of criminal liability for assault); Katko v. Modic (1993), 85 Ohio App.3d 834,
621 N.E.2d 809 (Eleventh District holds that ignorance of the law is not excusable
neglect under Civ.R. 60(B)); Mid Ohio Securities v. Wolfe, 9th Dist. No. 21511, 2003-
Ohio-5787 (failure to forward a complaint to one’s attorney is not excusable neglect);
N. American Specialty Ins. Co. v. Hoff (Nov. 9, 1993), 10th Dist. No. 93AP-915 (poor
record keeping and failure to contact an attorney do not establish excusable neglect).
{18} Although Soliday argues that Appellee has experience with litigation
from a prior divorce, this evidence is not in the record. Whether Appellee did or did
not have prior experience with using an attorney would not determine the outcome of
this case. See, e.g., Colley v. Bazell (1980), 64 Ohio St.2d 243, 249, 416 N.E.2d 605(the experience and understanding of the defendant with respect to litigation matters
is a relevant consideration but not a decisive factor in establishing excusable
neglect).
{19} Appellee’s argument, both to the trial court and before us, is primarily
that her defenses to the complaint are so strong that she did not need to establish
excusable neglect, or that any excuse at all should constitute excusable neglect
because “any doubt on the categorization of neglect should be resolved in favor of
the motion to set aside the judgment so that cases can be decided on their merits.”
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WFMJ Television, Inc. v. AT&T Federal Systems-CSC, 7th Dist. No. 01-CA-69, 2002-
Ohio-3013, at ¶21, citing GTE Automatic Elec. Inc. The problem with Appellee’s
argument, and her reliance of WFMJ Television, Inc. and similar cases, is that there
is no doubt about whether her actions constitute excusable neglect. She chose not
to respond to the complaint; chose never to respond to the court. This is never
accepted as a form of excusable neglect. Even in the WFMJ Television, Inc. case,
there was more than mere inaction that was alleged as excusable neglect. In that
case, the complaint was addressed to a specific room in defendant’s offices, which
happened to be the billing department. This room housed thirty employees, but the
complaint was not addressed to any particular person in that room. The person
designated to process civil complaints never received the complaint. The trial court
chose to grant the defendant’s Civ.R. 60(B) motion and this was upheld on appeal.
Appellee makes no such argument in this case. She simply argues that she was
excused from ignoring the complaint and any other filings because she was not an
attorney and she did not think of hiring an attorney.
{20} Appellee’s reliance on Wilson v. Lee, 172 Ohio App.3d 791, 2007-Ohio-
4542, is also unwarranted. In Wilson, the plaintiff filed an amended personal injury
complaint against the tenant and landlord of a building after he was bitten in the face
by a dog on the premises. Mr. O’Shea, the landlord, received a copy of the complaint
because he was one of the defendants, but he thought that he was just being notified
that one of his tenants was being sued. He did not answer the complaint, and default
judgment was granted on the liability aspect of the complaint. At this point, O’Shea
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realized that he was being held liable, so he immediately obtained counsel and
attended the damages hearing. The court awarded damages against O’Shea of
almost $70,000, prompting him to file a Civ.R. 60(B) motion for relief from judgment.
The trial court overruled the motion, but on appeal, the Second District Court of
Appeals reversed and granted relief from judgment. The reasons for granting the
motion were: 1) O’Shea filed a timely Civ.R. 60(B) motion and presented possible
meritorious defenses; 2) O’Shea’s confusion about the amended complaint was
understandable; 3) O’Shea responded to the proceedings as soon as he realized his
error before final judgment was rendered; and 4) the amount of damages was
substantial. Id. at ¶18. The appellate court noted that the result might have been
different had the amount of damages been $3,000 rather than $70,000. Id. at ¶19.
{21} In this case, the complaint is directed only to Appellee and there could
be no confusion about whether she was the intended defendant; she did not file any
type of response until after final judgment was rendered and a judgment lien was
issued; and the damages are $4,653, which is a relatively low amount and nothing
like the $70,000 at issue in the Wilson case. Although Appellee relies on Wilson, the
facts and circumstances of Wilson are much more supportive of Soliday’s argument.
{22} We are aware that this is a very rare case in which we are overruling a
trial court’s decision to grant a motion for relief from judgment, but the record does
not reflect even a scintilla of evidence on which to base any excusable neglect.
Appellee has simply presented no excusable reason why she failed to respond in any
way to the legal proceedings until after a judgment lien was issued. While there does
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appear on the record several averments that, if true, may provide her with some kind
of meritorious defense, these do not and cannot provide the basis to excuse
Appellee’s neglect, here.
{23} Soliday’s argument is persuasive and his assignment of error is
sustained. Appellee’s only excuses for not answering Soliday’s complaint are that
she did not know her possible defenses because she was not an attorney, and she
did not think of hiring an attorney until after the judgment lien was imposed. These
types of arguments, offered to form the basis for excusable neglect, have been
rejected time and time again. There is simply nothing in the record on which to base
such a finding, here. The judgment of the trial court sustaining Appellee’s motion for
relief from judgment is hereby reversed and the default judgment reinstated.
Vukovich, J., concurs.
DeGenaro, J., concurs.