Mill City Mtge. Loan Trust 2019-1, Wilmington Savs. Fund Soc., FSB v. Knight , 2021 Ohio 4135 ( 2021 )

[Cite as Mill City Mtge. Loan Trust 2019-1, Wilmington Savs. Fund Soc., FSB v. Knight, 2021-Ohio-4135.]
IN THE COURT OF APPEALS OF OHIO
ELEVENTH APPELLATE DISTRICT
ASHTABULA COUNTY
MILL CITY MORTGAGE LOAN CASE NO. 2020-A-0053
TRUST 2019-1, WILMINGTON
SAVINGS FUND SOCIETY, FSB,
AS TRUSTEE, Civil Appeal from the
Court of Common Pleas
Plaintiff-Appellee,
-v- Trial Court No. 2020 CV 00345
TODD B. KNIGHT, a.k.a. TODD
KNIGHT, SR., et al.,
Defendant-Appellant.
OPINION
Decided: November 22, 2021
Judgment: Affirmed
David T. Brady and Suzanne M. Godenswager, Sandhu Law Group, LLC, 1213 Prospect
Avenue, Suite 300, Cleveland, OH 44115 (For Plaintiff-Appellee).
Anne M. Reese, Legal Aid Society of Cleveland, 121 East Walnut Street, Jefferson, OH
44047 and Philip D. Althouse, Legal Aid Society of Cleveland, 1530 West River Road,
Suite 301, Elyria, OH 44035 (For Defendant-Appellant).
MARY JANE TRAPP, P.J.
{¶1} Appellant, Todd B. Knight, a.k.a. Todd Knight, Sr. (“Mr. Knight”), appeals
the judgment of the Ashtabula County Court of Common Pleas granting default judgment
against him and issuing a decree of foreclosure in favor of appellee, Mill City Mortgage
Loan Trust 2019-1, Wilmington Savings Fund Society, FSB, as Trustee (“Mill City”).
{¶2} Mr. Knight asserts one assignment of error, contending that the trial court
deprived him of due process by granting Mill City’s motion for default judgment without
providing him 14 days to respond pursuant to Civ.R. 6(C)(1) and the trial court’s local
rules.
{¶3} After a careful review of the record and pertinent law, we find that the trial
court did not abuse its discretion in entering a default judgment against Mr. Knight. The
proper procedure for holding a party in default is set forth in Civ.R. 55(A). Since Mr.
Knight neither answered the complaint nor appeared prior to Mill City’s filing of its motion
for default judgment, the response deadlines in Civ.R. 6(C)(1) and similar local rules were
not applicable, and the trial court was not required to provide him 14 days to respond.
{¶4} Thus, we affirm the judgment of the Ashtabula County Court of Common
Pleas.
Substantive and Procedural History
{¶5} On August 14, 2020, Mill City filed a complaint for “money, foreclosure in
reformation, and other equitable relief” against Mr. Knight and others in the Ashtabula
County Court of Common Pleas. Mr. Knight was served with the complaint and summons
by certified mail on August 20 and by personal service on August 22.
{¶6} Mr. Knight failed to appear or respond to the complaint. On October 9, Mill
City filed a motion for default judgment, a military affidavit, and an affidavit of status of
account. Four days later, on October 13, the trial court filed a judgment entry granting
default judgment against Mr. Knight and issuing a decree of foreclosure in favor of Mill
City.
{¶7} On October 15, Mr. Knight, through counsel, filed a notice of appearance
and a motion for leave to file an answer instanter. According to Mr. Knight’s counsel, she
was unaware of the trial court’s October 13 judgment entry at such time. The trial court
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filed a judgment entry on the same date granting Mr. Knight’s motion for leave and
permitting him until October 30 to file an answer.
{¶8} On October 20, Mr. Knight filed an answer and a motion to vacate the
October 13 judgment entry pursuant to Civ.R. 60(B). The trial court scheduled a hearing
on Mr. Knight’s motion to vacate. Prior to the scheduled hearing, Mr. Knight filed a notice
of appeal of the October 13 judgment entry and a notice withdrawing his motion to vacate.
{¶9} Mill City filed a precipe for an order of sale, which the clerk of courts
subsequently issued. Mr. Knight filed a motion to stay execution of the foreclosure
judgment pursuant to Civ.R. 62(B), which the trial court denied.
{¶10} Mr. Knight filed a motion for stay in this court, which we granted under
certain conditions, including that Mr. Knight, in lieu of a supersedeas bond, execute a quit
claim deed to Mill City and deposit it with the clerk of courts.
{¶11} Mr. Knight raises the following assignment of error:
{¶12} “The Trial Court erred to the prejudice of Appellant and deprived him of Due
Process and an opportunity to defend when it granted a Motion for Default only four days
after it was filed, without following Ohio Civ. R. 6(C)(1) and Loc. R. 3 of the Court of
Common Pleas of Ashtabula County, General Division, which both provide litigants a 14
day response time to a Motion.”1
1. Mill City obtained four extensions but did not ultimately file an appellee’s brief. App.R. 18(C) provides,
in relevant part, that “[i]f an appellee fails to file the appellee’s brief within the time provided by this rule, or
within the time as extended, * * * in determining the appeal, the court may accept the appellant’s statement
of the facts and issues as correct and reverse the judgment if appellant’s brief reasonably appears to sustain
such action.” Despite Mill City’s failure to file an appellee’s brief, the applicable law does not support
reversal of the trial court’s judgment.
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Standard of Review
{¶13} We review a trial court’s decision to grant a default judgment under an
abuse of discretion standard. Sericola v. Johnson, 2016-Ohio-1164, 61 N.E.3d 643, ¶ 18
(11th Dist.). An abuse of discretion is the “‘failure to exercise sound, reasonable, and
legal decision-making.’” State v. Beechler, 2d Dist. Clark No. 09-CA-54, 2010-Ohio-1900,
¶ 62, quoting Black’s Law Dictionary 11 (8th Ed.Rev.2004). When an appellate court is
reviewing a pure issue of law, the mere fact that the reviewing court would decide the
issue differently is enough to find error. Id. at ¶ 67. By contrast, where the issue on
review has been confided to the discretion of the trial court, the mere fact that the
reviewing court would have reached a different result is not enough, without more, to find
error. Id.
Due Process
{¶14} Mr. Knight asserts that the trial court violated his due process rights by
failing to follow Civ.R. 6(C)(1) and Ashtabula County Court of Common Pleas Loc.R. 3.
{¶15} Civ.R. 6(C)(1), which was amended effective July 1, 2019, states as follows:
{¶16} “Motion Responses and Movants’ Replies Generally. Responses to a
written motion, other than motions for summary judgment, may be served within fourteen
days after service of the motion. Responses to motions for summary judgment may be
served within twenty-eight days after service of the motion. A movant’s reply to a
response to any written motion may be served within seven days after service of the
response to the motion.”
{¶17} According to the 2019 Staff Notes, “[t]he provisions of Division (C)(1)
supersede and replace the differing deadlines for responding to motions imposed by the
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numerous local rules of Ohio trial courts, thereby eliminating confusion and creating
consistency by providing uniform statewide deadlines.”
{¶18} Ashtabula County Court of Common Pleas Loc.R. 3, entitled “time for filing
pleadings,” provides as follows:
{¶19} “Unless otherwise provided by law or other rule, all pleadings, amended
pleadings or motions shall be filed within fourteen (14) days after the filing of any entry
granting leave to file or overruling or sustaining a motion unless otherwise specified in the
entry itself.
{¶20} “The opposing party shall move or otherwise respond to the pleading,
amended pleadings, or motion within fourteen (14) days of filing such pleading, amended
pleading or motion unless otherwise ordered by the Court.”
{¶21} Loc.R. 3 appears to be applicable only to responses to pleadings and
motions filed following the trial court’s issuance of a judgment entry. However, we note
that Loc.R. 6(C)(2), entitled “all other motions,” provides as follows:
{¶22} “All other motions will be decided without oral hearing unless oral argument
is requested and determined necessary by the Court. The moving party shall file with the
motion a brief supporting memorandum containing the authorities relied upon and any
affidavits or other supporting documents required or appropriate to file with the motion.
Each party opposing the motion shall file a written response within fourteen (14) days
after receipt of the motion. Reply or additional briefs or memoranda shall be submitted
only with approval of the Court. Motions for leave to plead shall be in accordance with
local rules of Court.” (Emphasis added.)
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{¶23} In support of his due process argument, Mr. Knight cites several decisions
from this court and others reversing a trial court’s judgment based on its failure to follow
similar procedural rules. See Hillabrand v. Drypers Corp., 87 Ohio St.3d 517, 721 N.E.2d
1029 (2000) (involving a motion for sanctions); El-Mahdy v. Mahoning Natl. Bank, 7th
Dist. Mahoning No. 01-C.A.-27, 2002-Ohio-3851 (same); Akron v. Heller, 9th Dist.
Summit No. 26969, 2013-Ohio-5228 (involving a motion for relief from judgment);
Rendina v. Rendina, 11th Dist. Lake No. 91-L-019, 1992 WL 217993 (Feb. 28, 1992)
(involving a motion for guardian ad litem fees); In re Marquez, 11th Dist. Geauga No. 96-
G-1976, 1996 WL 702461 (Nov. 22, 1996) (same); Zamos v. Zamos, 11th Dist. Portage
No. 2004-P-0108, 2005-Ohio-6075 (involving a motion to pay child support arrearages).
{¶24} We find such cases to be distinguishable, however. Unlike the foregoing
cases, this case involves the trial court’s granting of a motion for default judgment that
the plaintiff filed after the defendant failed to answer or appear, which is governed by
Civ.R. 55.
Default Judgment
{¶25} The proper procedure for holding a party in default is set forth in Civ.R.
55(A). AMCA Internatl. Corp. v. Carlton, 10 Ohio St.3d 88, 90, 461 N.E.2d 1282 (1984).
It provides, in relevant part, as follows:
{¶26} “Entry of Judgment. When a party against whom a judgment for affirmative
relief is sought has failed to plead or otherwise defend as provided by these rules, the
party entitled to a judgment by default shall apply in writing or orally to the court therefor;
but no judgment by default shall be entered against a minor or an incompetent person
unless represented in the action by a guardian or other such representative who has
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appeared therein. If the party against whom judgment by default is sought has appeared
in the action, he (or, if appearing by representative, his representative) shall be served
with written notice of the application for judgment at least seven days prior to the hearing
on such application.” (Emphasis added.)
{¶27} According to the Supreme Court of Ohio, “[d]efault, under both pre-Civil
Rule decisions and under Civ.R. 55(A), is a clearly defined concept.” Ohio Valley
Radiology Assocs., Inc. v. Ohio Valley Hosp. Assn., 28 Ohio St.3d 118, 121, 502 N.E.2d
599 (1986). “‘A default by a defendant * * * arises only when the defendant has failed to
contest the allegations raised in the complaint and it is thus proper to render a default
judgment against the defendant as liability has been admitted or ‘confessed’ by the
omission of statements refuting the plaintiff’s claims.’” Id., quoting Reese v. Proppe, 3
Ohio App.3d 103, 105, 443 N.E.2d 992 (8th Dist.1981). “It is only when the party against
whom a claim is sought fails to contest the opposing party’s allegations by either pleading
or ‘otherwise defend[ing]’ that a default arises.” Id., quoting Civ.R. 55(A). The rule is
“logically consistent with the general rule of pleading contained in Civ.R. 8(D) * * * that
‘[a]verments in a pleading to which a responsive pleading is required * * * are admitted
when not denied in the responsive pleading.’” Id., quoting Civ.R. 8(D). Thus, “[i]f the
defending party has failed to appear in the action, a default judgment may be entered
without notice.” (Emphasis added.) Id. at 120.
{¶28} However, when a party has “appeared” in an action, the opposing party may
not take a default judgment against that party absent a seven-day notice. See id.
According to the Supreme Court of Ohio, this notice requirement is “‘intended to protect
those parties who, although delaying in a formal sense by failing to file [timely] pleadings
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* * *, have otherwise indicated to the moving party a clear purpose to defend the suit.’”
AMCA at 91, quoting H. F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 432
F.2d 689, 691 (D.C.Cir.1970).
{¶29} Based on the foregoing authority, several Ohio appellate courts have held
that response deadlines set forth in Civ.R. 6 and/or similar local rules are inapplicable to
motions for default judgment filed pursuant to Civ.R. 55(A) following a defendant’s failure
to file an answer or appear. See L.S. Industries v. Coe, 9th Dist. Summit No. Civ.A.
22603, 2005-Ohio-6736, ¶ 14, 17; Hover v. O’Hara, 12th Dist. Warren No. CA2006-06-
077, 2007-Ohio-3614, ¶ 13; Bank of Am., N.A. v. Sullivan, 3d Dist. Allen No. 1-15-09,
2015-Ohio-2736, ¶ 15; Natl. Collegiate Student Loan Trust 2007-2 v. Tigner, 2d Dist.
Montgomery Nos. 27841 & 28035, 2018-Ohio-4442, ¶ 13. Notably, the Third District
Court of Appeals’ decision in Sullivan involved a foreclosure case with nearly identical
facts to the present matter.
{¶30} According to the above courts, the appellant effectively admitted the
allegations in the complaint because he or she neither answered the allegations in the
complaint nor appeared prior to the plaintiff’s filing of its motion for default judgment.
Thus, the appellant was not entitled to the notice and hearing requirements of Civ.R.
55(A), and a default judgment could be entered against the appellant without notice. See
L.S. Industries at ¶ 17; Hover at ¶ 12; Sullivan at ¶ 15; Tigner at ¶ 17.
{¶31} The Twelfth District reasoned that “[w]here there is no requirement that
appellant be provided notice of the filing of the default motion, a local rule that sets the
deadlines for a party’s response to a filed motion is simply not applicable to this situation.”
Hover at ¶ 13.
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{¶32} Similarly, the Ninth District reasoned that “where no response can
reasonably be anticipated and no notice to the defaulting party is necessary,” there is “no
reason to delay the administration of justice and the entry of default judgment, where such
judgment is appropriate.” L.S. Industries at ¶ 14. According to the court, “[t]he interests
of justice and judicial economy do not dictate that a trial court conduct a hearing and delay
ruling on a timely motion for default judgment on the chance that the party in default might
at some speculative later date enter an appearance in the action.” Id. at ¶ 17.
{¶33} The Third District in Sullivan also rejected the appellant’s argument that the
trial court’s ruling on the motion for default judgment precluded him from appearing and
responding to the motion. Id. at ¶ 16. According to the court, the appellant was not
precluded from filing a motion for relief from judgment under Civ.R. 60(B) if he had a valid
defense to the motion for default judgment. Id. However, the appellant in Sullivan made
the tactical decision not to pursue that avenue for relief. Id. Instead, he filed a motion for
reconsideration, which the Supreme Court of Ohio has determined is a nullity. Id.; see
Pitts v. Ohio Dept. Transp., 67 Ohio St.2d 378, 379, 423 N.E.2d 1105 (1981) (“[M]otions
for reconsideration of a final judgment in the trial court are a nullity”).
Analysis
{¶34} In this case, Mr. Knight failed to answer or appear prior to Mill City’s filing of
its motion for default judgment, effectively admitting the allegations in the complaint.
Therefore, the notice and hearing requirements of Civ.R. 55(A) were not applicable.
Since Civ.R. 55(A) did not even require Mill City to provide notice of its motion for default
judgment, the response deadlines in Civ.R. 6(C)(1) and the trial court’s local rules were
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not applicable. Thus, the trial court was not required to give Mr. Knight 14 days to respond
to Mill City’s motion for default judgment.
{¶35} Although the trial court subsequently granted Mr. Knight’s motion for leave
to file an answer instanter, this act had no effect on the October 13 judgment entry. A
judgment decree in foreclosure is a final order. CitiMortgage, Inc. v. Roznowksi, 139 Ohio
St.3d 299, 2014-Ohio-1984, 11 N.E.3d 1140, ¶ 23. Courts have consistently treated as
void actions taken by a trial court subsequent to the entry of a final judgment. See Allstate
Ins. Co. v. Witta, 9th Dist. Summit No. 25738, 2011-Ohio-6068, ¶ 9-11. A trial court may
only relieve a party from judgment by the mechanisms provided by the Ohio Rules of Civil
Procedure, which, in this case, would be a motion for relief from judgment pursuant to
Civ.R. 60(B). See id. at ¶ 19; Civ.R.55(B) (“If a judgment by default has been entered,
the court may set it aside in accordance with Rule 60(B)”).
{¶36} The record demonstrates that Mr. Knight filed a motion to vacate the trial
court’s October 13 judgment entry pursuant to Civ.R. 60(B). Prior to the trial court’s
consideration, however, Mr. Knight filed a notice of appeal of the judgment entry and a
notice withdrawing his motion.
{¶37} While an appeal divests a trial court of jurisdiction to consider a Civ.R. 60(B)
motion for relief from judgment, jurisdiction may be conferred on the trial court through an
order by the reviewing court remanding the matter for consideration of the Civ.R. 60(B)
motion. Howard v. Catholic Social Serv. of Cuyahoga Cty., Inc., 70 Ohio St.3d 141, 147,
637 N.E.2d 890 (1994). Thus, Howard provides a mechanism by which a party may
protect its rights through an appeal and still obtain a ruling on a Civ.R. 60(B) motion while
the appeal is pending, i.e., by filing a motion to remand in conjunction with the notice of
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appeal. See Willoughby Eastlake City School Dist. v. Lake Cty. Court of Common Pleas,
11th Dist. Lake No. 99-L-130, 2000 WL 522456, *5 (Apr. 21, 2000). We caution litigants
to consider the foregoing authority prior to withdrawing a potentially meritorious Civ.R.
60(B) motion.
{¶38} While we are mindful of the serious consequences of foreclosure and are
sympathetic to Mr. Knight’s argument, the Supreme Court of Ohio has held that “the rules
of procedure must be applied consistently * * *.” Davis v. Immediate Medical Svcs., Inc.,
80 Ohio St.3d 10, 15, 684 N.E.2d 292 (1997). According to the court, “‘[h]owever hurried
a court may be in its efforts to reach the merits of a controversy, the integrity of procedural
rules is dependent upon consistent enforcement because the only fair and reasonable
alternative thereto is complete abandonment.’” Id., quoting Miller v. Lint, 62 Ohio St.2d
209, 214, 404 N.E.2d 752 (1980).
{¶39} Accordingly, the trial court did not abuse its discretion in entering a default
judgment against Mr. Knight.
{¶40} Mr. Knight’s sole assignment of error is without merit.
{¶41} For the foregoing reasons, the judgment of the Ashtabula County Court of
Common Pleas is affirmed.
THOMAS R. WRIGHT, J.,
MATT LYNCH, J.,
concur.
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