Katz v. Grossman , 2019 Ohio 2582 ( 2019 )

[Cite as Katz v. Grossman, 2019-Ohio-2582.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Larry Katz, :
Plaintiff-Appellant, :
No. 18AP-503
v. : (C.P.C. No. 15CV-2614)
Andrew S. Grossman, et al., : (REGULAR CALENDAR)
Defendants-Appellees. :
D E C I S I O N
Rendered on June 27, 2019
On brief: Golden & Meizlish, Co., LPA, and Keith Golden, for
appellant. Argued: Adam H. Karl.
On brief: Reminger Co., LPA, and Matthew L. Schrader, for
appellees. Argued: Matthew L. Schrader.
APPEAL from the Franklin County Court of Common Pleas
BEATTY BLUNT, J.
{¶ 1} Plaintiff-appellant, Larry Katz, appeals from a judgment by the Franklin
County Common Pleas Court denying his motion for leave to respond to appellees'
counterclaim, granting appellees' motion for default judgment on the counterclaim, and
overruling his objections to a magistrate's decision awarding damages on the counterclaim.
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} Appellant filed, pro se, a legal malpractice claim against appellees related to
appellees' representation of appellant in a divorce case and two related appeals.
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{¶ 3} On April 27, 2015, appellees filed an answer to the complaint. They also filed
a counterclaim for unpaid legal fees related to that representation. Appellant did not file an
answer to the counterclaim within the time period prescribed by rule.
{¶ 4} On July 10, 2015, appellees filed a motion for default judgment on their
counterclaim. They also filed contemporaneously a motion for summary judgment on
appellant's claims against them.
{¶ 5} On July 27, 2015, appellant filed a "Motion to File out of Rule" and
represented that it was "a response to the Defendant." To support his motion, appellant
stated that there were genuine issues of material fact to overcome the motion for summary
judgment. Appellant did not specifically mention the motion for default judgment.
{¶ 6} On July 27, 2015, appellant filed a "Memorandum Contra [Appellees']
Motion for Judgment." In that filing, appellant argued that he has valid defenses to
appellees' counterclaim for attorney fees. He requested that the court overrule appellees'
motion for summary judgment.
{¶ 7} On July 27, 2015, appellant filed "Motion for Extension of Time within which
to Move or Plead." Despite its title, the motion's substance was focused on responses to
appellees' discovery requests.
{¶ 8} On August 3, 2015, appellees requested an extension of time to file reply
briefs in support of their motions. In their request for an extension of time, appellees
represented that appellant's July 27, 2015 memorandum contra "seemingly relates to the
Motion for Default Judgment."
{¶ 9} On October 9, 2015, the trial court granted appellant's July 27, 2015 motion
to file out of rule, and instructed appellant that he had 14 additional days from the date of
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the order to respond to the motion for summary judgment. The court did not mention
appellees' motion for default judgment in its entry.
{¶ 10} On October 22, 2015, appellant retained counsel. Appellant's counsel filed a
motion for leave to reply to the counterclaim, instanter, and included a copy of the proposed
answer with the motion. This is the motion at issue in this appeal. The trial court denied
this motion on December 15, 2017.
{¶ 11} When appellant retained counsel, he voluntarily dismissed his claims.
Nonetheless, appellees' counterclaims for legal fees remained pending.
{¶ 12} On October 22, 2015, the trial court inadvertently terminated the entire case
based on appellant's voluntary dismissal of his claims.
{¶ 13} In January 2016, both parties filed witness disclosures. Additional witness
disclosures were filed in April 2016.
{¶ 14} On February 3, 2016, the trial court issued a notice stating that the motion
for default judgment would come before the court for a non-oral hearing on February 10,
2016.
{¶ 15} The next day, on February 4, 2016, the trial court reinstated the case, noting
that it had been inadvertently terminated.
{¶ 16} On October 20, 2016, appellant refiled his malpractice case. See Franklin C.P.
No. 16CV-9960. The two cases were consolidated.
{¶ 17} The docket reflects that the parties continued to engage in discovery
throughout 2016 and into 2017.
{¶ 18} On December 15, 2017, the trial court granted appellees' July 10, 2015 motion
for default judgment. The court denied appellant's October 22, 2015 motion for leave to
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plead to appellees' counterclaim for legal fees. The trial court referred the matter to a
magistrate for a damages hearing on appellees' counterclaim for legal fees.
{¶ 19} Appellant's legal malpractice claims were not part of the court's judgment.
On December 20, 2017, appellees moved to amend their answer to appellant's legal
malpractice claims to assert a claim for res judicata in light of the court’s decision granting
their motion for default judgment on their counterclaim for legal fees. Appellant opposed
this motion. The trial court granted the motion on January 22, 2018.
{¶ 20} On February 16, 2018, appellees filed a motion for summary judgment on
appellant's legal malpractice claims based upon res judicata and the court's decision to
grant default judgment on their counterclaim for legal fees.
{¶ 21} On March 8, 2018, the magistrate held a damages hearing on appellees' claim
for unpaid legal fees. Appellee, Andrew S. Grossman, testified at the hearing about his work
on appellant's divorce case and the fees still owed to appellees to represent appellant in that
action. Following the hearing, the magistrate awarded appellees all of their requested
damages, $14,180.06. Appellant filed objections to the decision.
{¶ 22} On May 25, 2018, the trial court overruled appellant's objections, adopted the
magistrate's decision, and terminated the case. The consolidated case, Franklin C.P. No.
16CV-9960, representing appellant's claim for legal malpractice, is stayed pending
resolution of this matter.
{¶ 23} Appellant has appealed the trial court's decision denying his motion for leave
to plead to appellees' counterclaim and its decision overruling his objections to the
magistrate's decision.
II. ASSIGNMENTS OF ERROR
{¶ 24} Appellant presents the following two assignments of error:
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I. THE TRIAL COURT ABUSED ITS DISCRETION WHEN IT
DENIED PLAINTIFF-APPELLANT'S MOTION FOR LEAVE
TO FILE REPLY TO COUNTERCLAIM, INSTANTER, FILED
OCTOBER 22, 2015 AND AS A RESULT SIMULTANEOUSLY
GRANTED DEFENDANTS-APPELLEES' MOTION FOR
DEFAULT JUDGMENT.
II. THE TRIAL COURT ABUSED ITS DISCRETION AND
COMMITTED PLAIN ERROR WHEN IT OVERRULED
PLAINTIFF-APPELLANT'S OBJECTIONS TO [THE]
MAGISTRATE'S DECISION FILED MARCH 16, 2018.
III. STANDARD OF REVIEW
{¶ 25} A trial court's denial of a motion for leave to file is reviewed for an abuse of
discretion. SER Lindenschmidt v. Bd. of Commrs., 72 Ohio St.3d 464 (1995). A trial court's
decision to overrule objections to a magistrate's decision is also reviewed for an abuse of
discretion. Pappas v. FM2, LLC, 10th Dist. No. 17AP-258, 2017-Ohio-8548, ¶ 31. Finally, a
decision to grant a motion for default judgment is reviewed for an abuse of discretion.
O'Brien v. Jirles-Clark, 10th Dist. No. 15AP-34, 2015-Ohio-3365, ¶ 6. Despite this
deferential standard, the law disfavors default judgments. The general policy in Ohio is to
decide cases on their merits. See AMCA Internl. Corp. v. Carlton, 10 Ohio St.3d 88 (1984).
{¶ 26} "The term 'abuse of discretion' connotes more than an error of law or
judgment; it implies that the court’s attitude is unreasonable, arbitrary or
unconscionable." SER Lindenschmidt at 465, citing Rock v. Cabral, 67 Ohio St.3d 108, 112
(1993). As the Supreme Court of Ohio recognizes:
[M]ost instances of abuse of discretion will result in decisions
that are simply unreasonable, rather than decisions that are
unconscionable or arbitrary. A decision is unreasonable if
there is no sound reasoning process that would support that
decision. It is not enough that the reviewing court, were it
deciding the issue de novo, would not have found that
reasoning process to be persuasive, perhaps in view of
countervailing reasoning processes that would support a
contrary result.
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AAAA Ents., Inc. v. River Place Community. Urban Redevelopment Corp., 50 Ohio St.3d
157, 161, (1990).
IV. LEGAL ANALYSIS
A. The trial court did not abuse its discretion when it denied appellant's
motion for leave and ultimately granted the motion for default
judgment.
{¶ 27} Civ.R. 6(B) governs motions for an extension of time. It states:
When by these rules or by a notice given thereunder or by order
of court an act is required or allowed to be done at or within a
specified time, the court for cause shown may at any time in its
discretion * * * (2) upon motion made after the expiration of
the specified period permit the act to be done where the failure
to act was the result of excusable neglect * * *.
Thus, the proper standard by which a trial court analyzes such a motion for leave to plead
out of rule is that of excusable neglect. Marion Prod. Credit Assn v. Cochran, 40 Ohio St.3d
265, 271 (1998), citing Miller v. Lint, 62 Ohio St.2d 209, 214 (1980). Regarding "excusable
neglect," the Supreme Court has explained:
The determination of whether neglect is excusable or
inexcusable must take into consideration all the surrounding
facts and circumstances, and courts must be mindful of the
admonition that cases should be decided on their merits, where
possible, rather than procedural grounds. Although excusable
neglect cannot be defined in the abstract, the test for excusable
neglect under Civ.R. 6(B)(2) is less stringent than that applied
under Civ.R. 60(B).
(internal citations omitted.); SER Lindenschmidt at 466 see also Marion Prod. at 271. But
" 'the term " 'excusable neglect' is an elusive concept which has been difficult to define and
to apply." Gamble v. Hartshorn, LLC v. Lee, 10th Dist. No. 17AP-35, 2018-Ohio-980, ¶ 21
(analyzing "excusable neglect" in the context of a Civ.R. 60(B) motion), quoting Natl. City
Bank v. Calvey, 10th Dist. No. 05AP-1229, 2006-Ohio-3101, ¶ 8.
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{¶ 28} We and the Supreme Court have recognized that "neglect is inexcusable when
the movant's inaction 'reveals a complete disregard for the judicial system and the rights of
the appellee.' " Id., quoting GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St.2d
146, 153 (1976). We have also held " '[u]nusual or special circumstances can justify neglect,
but if the party could have controlled or guarded against the happening or event [he or] she
later seeks to excuse, the neglect is not excusable.' " Id., quoting Calvey at ¶ 8.
{¶ 29} The same analysis applies even when a party is proceeding pro se. Neither
lack of counsel nor ignorance of the legal system constitutes "excusable neglect." Gamble
at ¶ 26, citing Dayton Power & Light v. Holdren, 4th Dist. No. 07CA21, 2008-Ohio-5121,
¶ 12. Rather, pro se litigants are presumed to have knowledge of the law and legal
procedures, and they are held to the same standard as litigants who are represented by
counsel. Id.; State ex rel. Fuller v. Mengel, 100 Ohio St.3d 352, 2003-Ohio-6448, ¶ 10;
Sabouri v. Ohio Dept. of Job & Family Servs., 145 Ohio App.3d 651, 654 (10th Dist.2001).
{¶ 30} Appellees filed their counterclaim for legal fees on April 27, 2015. Appellant
did not move or plead in response to that counterclaim within the time permitted by rule.
Appellant has never suggested, in this case that he himself initiated, that he was not served
with the counterclaim. Appellees then moved for default judgment on their counterclaim
on July 10, 2015. Despite this second notice that there was a counterclaim pending,
appellant still, for months, did not move for leave to respond to the counterclaim. Although
he was proceeding pro se at that point, appellant was not confused about how to file
documents with the court or that he needed to respond to appellees' filings in general. He
filed numerous documents in response to appellees' other filings before he eventually
retained counsel. Although appellant's counsel moved for leave to plead on October 22,
2015, the only justification he gave for appellant's failure to respond timely to the
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counterclaim was appellant's pro se status and unfamiliarity with the civil rules. Appellant
contends that he believed that he was not required to respond to the counterclaim because
his complaint and the subsequent filings made clear that he denied the appellees'
allegations. Appellant's other justifications for why the court should grant his motion for
leave to plead did not address the justification for his failure to respond to the counterclaim,
but rather went to the totality of the circumstances, that default judgment had not yet been
granted, appellant filed a responsive pleading with his motion for leave, appellees would
not be prejudiced by granting leave to respond because the trial date was 15 months away,
and cases should be decided on their merits.
{¶ 31} The trial court found that appellant failed to show excusable neglect. Despite
his pro se status, the court noted that appellant is held to the same standard as a party
represented by counsel. Even if appellant did not understand that he needed to respond to
the counterclaim, he should have been alerted to that fact when appellees filed their motion
for default judgment. The trial court found that appellant failed to explain this neglect and
failed to explain why he still waited three months after the motion for default was filed to
retain counsel and seek leave to respond. The trial court provided a sufficient explanation
for its discretionary decision, and we can find nothing unreasonable, arbitrary, or
unconscionable in the trial court's denial of leave.
{¶ 32} Appellant has not otherwise argued that the trial court failed to satisfy a
requirement to grant default judgment. See Civ.R. 55(A). Rather, he argues only that the
court's decision to grant default judgment should be reversed because the court abused its
discretion in failing to grant him leave to respond to appellees' counterclaim. Because we
find that the trial court did not abuse its discretion in denying the motion for leave, we
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overrule appellant's first assignment of error and affirm the trial court's decision to deny
appellant's motion for leave and grant default judgment to appellees on their counterclaim.
B. The trial court did not abuse its discretion or commit plain error when
it overruled appellant's objections to themagistrate'sdecision.
{¶ 33} Appellant argues that the magistrate acted improperly by presumably
admitting evidence constituting business records without requiring that a proper
foundation be laid for the records. Specifically, appellant identifies three exhibits he alleges
were improperly admitted: the parties' engagement agreement, an itemized account
history, and the most recent billing statement. Appellant argues that appellees failed to
provide testimony that the records were "made at or near the time" of the events, such that
the records should have been excluded. Appellant contends that there is no evidence that
he owes any legal fees to appellees without this impermissible hearsay evidence. The trial
court found that the engagement agreement and final fee statement were already part of
the record because they were attached to the counterclaim, and that Grossman's testimony
regarding his personal knowledge of the exhibits and his familiarity with the billing
practices was sufficient to support admission of the exhibits.
{¶ 34} Upon review, this court finds that a damages hearing, although prudent, was
unnecessary in this matter. Civ.R. 55 provides that "[i]f, in order to enable the court to enter
judgment or to carry it into effect, it is necessary to take an account or to determine the
amount of damages * * *, the court may conduct such hearings or order such references as
it deems necessary and proper." Thus, a Civ.R. 55(A) is permissive, not mandatory, and it
is wholly unnecessary if the damages are able to be easily determined. Am.
Communications of Ohio, Inc. v. Hussein, 10th Dist. No. 11AP-352, 2011-Ohio-6766, ¶ 15,
citing Nationwide Mut. Fire Ins. Co. v. Barrett, 7th Dist. No. 08 MA 130, 2008-Ohio-6588,
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¶ 26. " '[W]hen the complaint and the motion for default judgment clearly set forth the
amount of damages' and reveal the amount to be ascertainable, 'the trial court does not
abuse its discretion in relying on the amount asserted' in the complaint." Id. at ¶ 16, quoting
Barrett at ¶ 26. But if " 'the determination of damages necessarily requires consideration
of information outside a written instrument, the trial court abuses its discretion in failing
to hold an evidentiary hearing to determine the exact amount of damages.' " Id., quoting
L.S. Industries v. Coe, 9th Dist. No. Civ.A 22603, 2005-Ohio-6736, ¶ 20. Plainly, a default
hearing is not required for liquidated damages as such damages " 'can be determined with
exactness from the agreement between the parties or by arithmetical process or by the
application of definite rules of law.' " Faulkner v. Integrated Servs. Network, Inc., 8th Dist.
No. 81877, 2003-Ohio-6474, ¶ 27, quoting Huo Chin Yin v. Amino Prods. Co., 141 Ohio St.
21, 29 (1943); see also Keller & Kehoe, L.L.P. v. Smart Media of Delaware, Inc., 8th Dist.
No. 103607, 2016-Ohio-5409, ¶ 30.
{¶ 35} Here, the counterclaim averred that appellees were owed $14,180.06 from
appellant for unpaid legal fees. (Counterclaim at ¶ 6-7.) Appellees attached the parties'
engagement agreement to their counterclaim, along with the final account statement that
showed an unpaid balance of $14,180.06. The damages were ascertainable from the
counterclaim, and no hearing was necessary. In any event, Grossman testified based upon
his personal knowledge that the amount owed by appellant was $14,180.06. Although
appellees may have also been proffering his testimony as that of an expert and a records
custodian, it is uncontroverted that Grossman had personal knowledge as the person who
signed the engagement agreement with appellant and one of the attorneys who worked on
appellant's divorce case. The court finds no abuse of discretion in the trial court's
determination regarding the amount of damages owed to appellees on their counterclaim.
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We overrule appellant's second assignment of error, and we affirm the trial court's decision
to overrule appellant's objections to the magistrate's decision and award damages to
appellees in the amount of $14,180.06 on their counterclaim against appellant.
V. CONCLUSION
{¶ 36} Because the trial court did not abuse its discretion in denying appellant's
October 22, 2015 motion for leave and awarding damages to appellees on their
counterclaim, we overrule appellant's two assignments of error and we affirm the judgment
of the Franklin County Court of Common Pleas.
Judgment affirmed.
BRUNNER and NELSON, JJ., concur.