Ohio Neighborhood Fin. v. Stevens ( 2011 )

[Cite as Ohio Neighborhood Fin. v. Stevens, 2011-Ohio-2760.]
IN THE COURT OF APPEALS OF OHIO
FOURTH APPELLATE DISTRICT
LAWRENCE COUNTY
Ohio Neighborhood Finance, Inc., :
:
Plaintiff-Appellant, :
: Case No. 10CA43
v. :
: DECISION AND
Toni Stevens, : JUDGMENT ENTRY
:
Defendant-Appellee. : File-stamped date: 6-02-11
________________________________________________________________
APPEARANCES:
Anthony M. Sharett and Samir B. Dahman, Bricker & Eckler, L.L.P., Columbus, OH, for
Appellant.1
________________________________________________________________
Kline, J.:
{¶1} Ohio Neighborhood Finance, Inc. (hereinafter “Ohio Neighborhood”) appeals
the judgment of the Ironton Municipal Court, which denied its motion for relief from
judgment. Ohio Neighborhood contends that the trial court abused its discretion when it
entered a default judgment against Toni Stevens (hereinafter “Stevens”) with an interest
rate of four percent per annum rather than twenty-five percent. However, because we
find that Ohio Neighborhood used a Civ.R. 60(B) motion as a substitute for a direct
1
Defendant-Appellee, Toni Stevens, did not file a brief or otherwise enter an
appearance in this appeal. Under App. R. 18(C), we may accept Ohio Neighborhood
Finance Inc.’s statement of the facts and issues as correct and reverse the trial court’s
judgment as long as its brief reasonably appears to sustain reversal. See Sprouse v.
Miller, Lawrence App. No. 06CA37, 2007-Ohio-4397, at fn.1; State v. Miller (1996), 110
Ohio App. 3d 159, 161-62. “An appellate court may reverse a judgment based solely on
a consideration of an appellant’s brief.” Sprouse at fn.1; see, also, Ford Motor Credit
Co. v. Potts (1986), 28 Ohio App. 3d 93, 96; State v. Grimes (1984), 17 Ohio App. 3d 71,
71-72. However, because we find that Ohio Neighborhood Finance Inc. improperly
used a Civ.R. 60(B) motion as a substitute for a direct appeal, we dismiss the appeal.
Lawrence App. No. 10CA43 2
appeal, we do not reach the merits of Ohio Neighborhood’s argument. Accordingly, we
dismiss Ohio Neighborhood’s appeal.
I.
{¶2} Ohio Neighborhood entered into a loan agreement with Stevens on July 8,
2009, whereby Ohio Neighborhood loaned Stevens $500. Under the loan agreement,
Stevens agreed to pay a loan origination charge of $30.00 and a credit investigation fee
of $10.00. Coupled with interest, Stevens was obligated to pay Ohio Neighborhood
$545.16 on July 22, 2009. The “PROMISE TO PAY” section of the loan agreement
provides: “You [i.e., Stevens] promise to pay us [i.e., Ohio Neighborhood] $540.00 (the
Principal Amount of this loan) plus interest at a rate of 25% per annum on the principal
outstanding for the time outstanding from the date of this Customer Agreement until
paid in full. Interest shall be computed daily upon the principal balance outstanding by
using the simple interest method, assuming a 365-day year.”
{¶3} Stevens did not repay the loan on July 22, 2009. Ohio Neighborhood
demanded payment, but Stevens failed to make the payments due and owing on the
loan. On November 23, 2009, Ohio Neighborhood filed its complaint against Stevens in
Ironton Municipal Court. Ohio Neighborhood sought judgment against Stevens in the
sum of $560.16 with interest at the agreed upon rate of twenty-five percent per annum
from the date of default.
{¶4} Stevens failed to respond or otherwise plead to Ohio Neighborhood’s
complaint. Consequently, on April 5, 2010, Ohio Neighborhood moved for default
judgment against Stevens. The magistrate issued a decision on May 11, 2010, which
provided for judgment in the amount of $560.16 and an interest rate of four percent per
Lawrence App. No. 10CA43 3
annum. The trial court’s May 24, 2010 Judgment Entry approved and adopted the
magistrate’s decision. The Judgment Entry provides for judgment in favor of Ohio
Neighborhood against Stevens in the amount of $560.16 plus post-judgment interest at
the “statutory rate from date of Judgment.” At the time of judgment, the statutory rate of
interest was four percent.
{¶5} On August 2, 2010, Ohio Neighborhood moved for relief from judgment under
Civ.R. 60(B). In its motion, Ohio Neighborhood argued that the trial court improperly
reduced the interest rate on Stevens’ loan from twenty-five percent to four percent.
Ohio Neighborhood attached a copy of Ohio Neighborhood Fin., Inc. v. Dotson,
Lawrence App. No. 09CA27, 2010-Ohio-3366. In Dotson, we addressed a substantially
similar issue, though not in the Civ.R. 60(B) context. We held that where a loan
agreement provides for a specific interest rate, and such a rate is authorized by statute,
the trial court errs when it reduces the interest rate below the rate specified in the loan
agreement.
{¶6} The magistrate held a motion hearing on September 27, 2010, and, on
September 28, 2010, the magistrate recommended denial of Ohio Neighborhood’s
motion without explanation. On October 18, 2010, the trial court denied Ohio
Neighborhood’s motion for relief without explanation.
{¶7} Ohio Neighborhood appeals and asserts the following assignment of error:
“THE TRIAL COURT ABUSED ITS DISCRETION AFFIRMING THE MAGISTRATE’S
DECISION TO REDUCE TO 4% PER ANNUM, THE INTEREST RATE ON THE DEBT
IN THE DEFAULT JUDGMENT GRANTED IN FAVOR OF APPELLANT OHIO
NEIGHBORHOOD FINANCE, INC.”
Lawrence App. No. 10CA43 4
II.
{¶8} Ohio Neighborhood argues that the trial court abused its discretion when it
adopted the magistrate’s decision. Specifically, Ohio Neighborhood objects to the trial
court’s decision to reduce the interest rate on Stevens’ debt from twenty-five percent per
annum, as provided in the loan agreement, to four percent. Despite framing its
argument in this fashion, Ohio Neighborhood actually appeals the denial of its motion
for relief from judgment under Civ.R. 60(B).
{¶9} We review a trial court’s decision regarding a motion for relief from judgment
under an abuse of discretion standard. Dayton Power and Light v. Holdren, Highland
App. No. 07CA21, 2008-Ohio-5121, at ¶10; Harris v. Anderson, 109 Ohio St. 3d 101,
2006-Ohio-1934, at ¶7. An abuse of discretion connotes more than a mere error of
judgment; it implies that the court’s attitude is arbitrary, unreasonable, or
unconscionable. Blakemore v. Blakemore (1983), 5 Ohio St. 3d 217, 219.
{¶10} Civ.R. 60(B) provides: “On motion and upon such terms as are just, the court
may relieve a party or his legal representative from a final judgment, order or
proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable
neglect; (2) newly discovered evidence which by due diligence could not have been
discovered in time to move for a new trial under Rule 59(B); (3) fraud (whether
heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of
an adverse party; (4) the judgment has been satisfied, released or discharged, or a prior
judgment upon which it is based has been reversed or otherwise vacated, or it is no
longer equitable that the judgment should have prospective application; or (5) any other
reason justifying relief from the judgment. The motion shall be made within a
Lawrence App. No. 10CA43 5
reasonable time, and for reasons (1), (2) and (3) not more than one year after the
judgment, order or proceeding was entered or taken. A motion under this subdivision
(B) does not affect the finality of a judgment or suspend its operation.”
{¶11} “To prevail on a motion brought under Civ.R. 60(B), the movant must
demonstrate that: (1) the party has a meritorious defense or claim to present if relief is
granted; (2) the party 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, at paragraph two of the syllabus.
{¶12} Initially, we note that in its sole assignment of error, Ohio Neighborhood
focuses its challenge on the merits of the trial court’s decision. That is, Ohio
Neighborhood argues that the trial court abused its discretion by reducing the interest
rate on Stevens’ debt in its judgment. The trial court entered judgment against Stevens
on May 24, 2010, which provided for interest at the statutory rate (i.e., four percent per
annum) as opposed to the twenty-five percent rate from the loan agreement. Ohio
Neighborhood filed its motion for relief from judgment on August 2, 2010.
{¶13} Ohio Neighborhood asserts that it “chose to file its Civ.R. 60(B) motion in lieu
of directly appealing the court’s decision because [Ohio Neighborhood] contemplated
that once it brought the [holding of Dotson] to the trial court’s attention, the court would
promptly modify the judgment accordingly and alleviate the need to burden the docket
with an appeal.” Appellant’s Brief at 4.
Lawrence App. No. 10CA43 6
{¶14} We find, however, that Ohio Neighborhood used a Civ.R. 60(B) motion as a
substitute for a direct appeal. “‘[W]here the remedy of appeal is available to a party,
and where the issues raised in a motion for relief from judgment are those which could
properly have been raised on appeal, a motion for relief from judgment will be denied.’”
Newell v. White, Pickaway App. No. 05CA27, 2006-Ohio-637, at ¶14, quoting
Burroughs Real Estate Co. v. Zennie R. Heath (Mar. 20, 1980), Cuyahoga App. No.
40476. “In order to bring [itself] within the limited area of Civ.R. 60(B), [Ohio
Neighborhood] must establish the existence of extraordinary circumstances which
rendered [it] unable to appeal[.] * * * [A] party should not be permitted to circumvent the
appeals process through application of Civ.R. 60(B), since it is the function of the
appellate court to correct legal errors committed by the trial court.” Newell at ¶14,
quoting Taylor v. Taylor (Mar. 27, 1987), Lawrence App. No. 1801 (emphasis sic). See,
also, Plotkin v. Pacific Tel. & Tel. Co. (C.A.9, 1982), 688 F.2d 1291; 7 Moore Federal
Practice (1985), Paragraph 60.18(8).
{¶15} In short, Civ.R. 60(B) was intended to provide relief from a final judgment in
specific, enumerated situations and cannot be used as a substitute for a direct, timely
appeal. See Doe v. Trumbull County Children Services Board (1986), 28 Ohio St. 3d
128, at paragraph two of the syllabus; Newell at ¶15. “If a party raises the same
question in a Civ.R. 60(B) motion as [it] could have raised on a direct appeal, [that party]
could get an indirect extension of time for appeal by appealing the denial of the Civ.R.
60(B) motion.” Newell at ¶15, citing Parke-Chapley Construction Co. v. Cherrington
(C.A.7, 1989), 865 F.2d 907, 915. Thus, “[w]hen a Civ.R. 60(B) motion is used as a
substitute for a timely appeal, and when the denial of that motion is subsequently
Lawrence App. No. 10CA43 7
appealed, the proper response is the dismissal of the appeal.” Garrett v. Gortz,
Cuyahoga App. No. 90625, 2008-Ohio-4369, at ¶14, citing State ex rel. Richard v.
Cuyahoga Cty. Commrs., 89 Ohio St. 3d 205, 2000-Ohio-135. See, also, Elliott v.
Smead Mfg. Co., Hocking App. Nos. 08CA13 & 08AP13, 2009-Ohio-3754, at ¶12-13.
{¶16} Here, Ohio Neighborhood did not directly appeal the trial court’s judgment.
On a direct appeal, Ohio Neighborhood could have raised the same issue that it raised
in its Civ.R. 60(B) motion. That is, Ohio Neighborhood could have argued that the
interest rate on the judgment against Stevens should have been twenty-five percent per
annum as provided in the loan agreement rather than the four percent rate awarded by
the trial court. Therefore, Ohio Neighborhood improperly used a Civ.R. 60(B) motion as
a substitute for a direct appeal.
{¶17} Accordingly, we reject Ohio Neighborhood’s assignment of error and dismiss
its appeal.
APPEAL DISMISSED.
Lawrence App. No. 10CA43 8
JUDGMENT ENTRY
It is ordered that the APPEAL BE DISMISSED. Appellant shall pay the costs
herein taxed.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the
Ironton Municipal Court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule
27 of the Rules of Appellate Procedure. Exceptions.
Abele, J.: Concurs in Judgment and Opinion.
McFarland, J.: Concurs in Judgment Only.
For the Court
BY:_____________________________
Roger L. Kline, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment entry
and the time period for further appeal commences from the date of filing with the clerk.