EBC Asset Invest., Inc. v. Brown , 2023 Ohio 2080 ( 2023 )

[Cite as EBC Asset Invest., Inc. v. Brown, 2023-Ohio-2080.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
MONTGOMERY COUNTY
EBC ASSET INVESTMENT INC. :
:
Appellees : Appeal No. 29671
:
v. : Trial Court Case No. 2013 CV 03654
:
JAMES W. BROWN, et al. : (Civil Appeal from Common Pleas
: Court)
Appellants :
:
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OPINION
Rendered on June 23, 2023
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WILLIAM L. BAKER and ANNA S. FISTER, Attorneys for Appellant, Cynthia L. Drake
CAREY K. STEFFAN, Attorney for Appellee, CIRAS LLC
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TUCKER, J.
{¶ 1} Cynthia L. Drake appeals from the trial court’s judgment entry overruling her
motion to vacate a decade-old default judgment for failure of service of process. Drake
contends the complaint and summons were sent to a non-existent address, resulting in
her never being served, thereby making the 2013 judgment void. She argues that the trial
court erred in overruling her motion where service to the wrong address was not
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reasonably calculated to apprise her of the pendency of the action, she provided an
affidavit denying receipt of service, and the plaintiff admitted attempting service at a non-
existent address. Drake also asserts that the trial court erred in overruling her motion
based on her actual knowledge of the lawsuit.
{¶ 2} Upon review, we conclude that the trial court did not err in holding an
evidentiary hearing and finding that the postal service corrected the erroneous address
and that the plaintiff obtained ordinary-mail service on Drake at her actual residence. We
also conclude that the trial court did not overrule her motion based on her actual
knowledge of the lawsuit. The trial court overruled her motion based on a finding that the
plaintiff obtained residential service notwithstanding an error on a mailing envelope.
Accordingly, the trial court’s judgment will be affirmed.
I. Background
{¶ 3} EBC Asset Investment, Inc. (EBC) was the holder of a promissory note
signed by defendant-appellant Drake as a guarantor. EBC filed a June 2013 complaint
for judgment on the promissory note and the guarantee. EBC attempted to serve Drake
by certified mail at 825 South Columbus Street in Xenia, Ohio. Drake actually resided at
852 South Columbus Street, and “825” is a non-existent address. EBC’s attempted
certified-mail service was retuned marked “unclaimed.” When returned, however, the
number “852” had been written on the certified-mail envelope and the number “825” had
been marked through. EBC subsequently attempted ordinary-mail service on Drake,
again at the non-existent 825 South Columbus Street address. This mailing was never
returned as “undeliverable” or otherwise.
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{¶ 4} In September 2013, EBC moved for a default judgment based on Drake’s
failure to answer. The trial court sustained the motion and entered a default judgment. In
October 2013, Drake moved for Civ.R. 60(B) relief from the default judgment, citing
inadvertence and excusable neglect. The motion did not mention a lack of service.
Following a hearing, the trial court denied Civ.R. 60(B) relief. Drake then commenced a
Chapter 13 bankruptcy proceeding and referenced EBC’s lawsuit and the judgment
against her.
{¶ 5} In August 2018, EBC assigned its interest in the judgment to appellee Ciras,
LLC. Thereafter, nearly nine years after entry of the default judgment, Drake filed a
September 28, 2022 motion seeking to vacate it based on a lack of service of process.
She argued that attempted ordinary-mail service at a non-existent address was
ineffective. Drake asserted that the error had deprived her of an opportunity to respond
to EBC’s complaint in violation of her due-process rights. Accompanying the motion were
a number of exhibits, including an affidavit in which Drake denied receiving service of any
documents in the case and professed her unawareness of being sued prior to the default
judgment.
{¶ 6} The trial court held a November 23, 2022 hearing on Drake’s motion. The
only witness at the hearing was Drake. She testified and identified the various exhibits
accompanying her motion. She explained that 825 South Columbus Street did not exist
and that she had resided at 852 South Columbus Street at all relevant times. Drake
denied receiving service of process by ordinary mail and claimed not to have known about
EBC’s lawsuit until after entry of the default judgment.
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{¶ 7} Following the hearing, the trial court filed a decision and entry overruling
Drake’s motion. Based on the testimony and exhibits presented, the trial court reasoned
as follows:
The court concludes from the circumstances that Cynthia L. Drake
was served with a summons and a copy of the complaint in July of 2013.
The regular mail, with the summons and complaint, was not returned
undeliverable. The regular mail was received by Cynthia L. Drake. On or
about July 29, 2013 Cynthia L. Drake received a summons and complaint
by regular mail. The postal employees corrected the address at that time so
it was delivered to the correct address, 852 South Columbus Street, Xenia,
Ohio.
Defendant Cynthia L. Drake’s receipt of the notice is verified by her
having an attorney file a Motion for 60(B) Relief in October of 2013. It was
further verified by her appearing for the motion hearing in November of 2013
and by Defendant filing a Petition for Relief under Chapter 13 of the
Bankruptcy Code. The same attorney represented Defendant Drake in the
State trial court proceedings and in the Bankruptcy Court. Since Defendant
Drake was served with a summons and complaint in this matter, the court
had jurisdiction at the time the judgment was entered and continues to have
jurisdiction. The Default Judgment is not void ab initio.
Defendant Cynthia L. Drake’s Motion to Vacate Judgment for Failure
of Service is not well taken and it is hereby OVERRULED.
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November 30, 2022 Decision and Entry at 2-3.
II. Analysis
{¶ 8} Drake advances three assignments of error. The first two assignments of
error state:
A. THE TRIAL COURT ABUSED ITS DISCRETION WHEN IT
OVERRULED MRS. DRAKE’S MOTION TO VACATE THE DEFAULT
JUDGMENT AGAINST HER BECAUSE SERVICE WAS NOT
REASONABLY CALCULATED, UNDER ALL THE CIRCUMSTANCES, TO
APPRISE MRS. DRAKE OF THE PENDENCY OF THE ACTION AND
AFFORD HER AN OPPORTUNITY TO PRESENT HER OBJECTIONS
WHEN PLAINTIFF TRANSPOSED THE NUMBERS OF HER ADDRESS
AND ONLY EVER SERVED THE WRONG ADDRESS WITH WHICH MRS.
DRAKE HAD NO ASSOCIATION WHATSOEVER, WHERE THERE WAS
NO ONE WITH ANY DUTY TO FORWARD SERVICE OF PROCESS TO
MRS. DRAKE AND, INDEED, MRS. DRAKE NEVER RECEIVED SERVICE
OF PROCESS.
B. THE TRIAL COURT ABUSED ITS DISCRETION WHEN IT
OVERRULED MRS. DRAKE’S MOTION TO VACATE THE DEFAULT
JUDGMENT AGAINST HER BECAUSE MRS. DRAKE’S REBUTTAL OF
THE PRESUMPTION OF SERVICE WAS NOT ONLY
UNCONTROVERTED BUT STRONGLY CORROBORATED BY
RESPONDENT’S ADMISSION THAT PLAINTIFF WAS AT FAULT FOR
ONLY EVER ATTEMPTING SERVICE UPON MRS. DRAKE AT THE
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WRONG AND NON-EXISTENT ADDRESS.
{¶ 9} In her first two assignments of error, Drake argues that no rebuttable
presumption of service arose where EBC attempted certified-mail and ordinary-mail
service at a non-existent address. Alternatively, she maintains that even if a presumption
of valid service did arise, she successfully rebutted it with an uncontroverted affidavit that
she never received service. Drake contends her affidavit was corroborated by EBC’s
admission that it attempted service at a non-existent address. According to Drake, this
admission is “virtually conclusive” that she never was served. Finally, she asserts that
appellee Ciras itself “offered no proof of successful service.” Under these circumstances,
she reasons that the trial court’s judgment must be reversed and the default judgment
vacated.
{¶ 10} Upon review, we find Drake’s first two assignments of error to be
unpersuasive. In the usual case, “when service of process is sent by ordinary mail after
service by certified mail has been returned ‘unclaimed,’ and it is not returned in the mail,
a rebuttable presumption arises that the defendant has been served with process.” Sec.
Natl. Bank & Tr. Co. v. Murphy, 2d Dist. Clark No. 2552, 1989 WL 80954, at *1 (July 20,
1989). “The ‘[u]nclaimed’ designation implies that the person may in fact reside or receive
mail at the designated address but for whatever reason has chosen not to sign for the
certified mail. In that situation, a follow-up communication by ordinary mail is reasonably
calculated to provide the interested party with notice and an opportunity to be heard. Such
a communication, not returned, bears a strong inference that the intended recipient
received the letter.” In re Thompkins, 115 Ohio St. 3d 409, 2007-Ohio-5238, 875 N.E.2d
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582, ¶ 23. Under the foregoing scenario, a defendant would be obligated to respond by
filing an affidavit denying receipt of service of process. The trial court then typically would
hold a hearing to assess the defendant’s credibility and evaluate the evidence to
determine whether service was perfected. See, e.g., Wright-Patt Credit Union, Inc. v.
Danes, 2d Dist. Montgomery No. 26433, 2015-Ohio-2184, ¶ 13.
{¶ 11} Drake suggests that this burden-shifting approach need not apply when
certified-mail and ordinary-mail service are sent to the wrong address or, worse yet, to a
non-existent address. She maintains that service to a non-existent address fails to
establish a presumption of valid service. In any event, she further argues that her affidavit
rebutted any presumption of service and that Ciras offered no evidence of successful
service to challenge her affidavit.
{¶ 12} In Gaston v. Medina Cty. Bd. of Revision, 133 Ohio St.3d 941, 2012-Ohio-
3872, 975 N.E.2d 941, ¶ 14, the Ohio Supreme Court recognized that proof of a plaintiff’s
“use of the wrong address” will “defeat” the presumption of valid service. We need not
dwell on that issue, however, because Drake filed an affidavit denying receipt of service,
and the trial court held an evidentiary hearing on the issue. Regardless of whether a
presumption of service never arose or whether it arose and Drake negated it, the ultimate
issue was whether EBC in fact obtained valid service of process on Drake. If it did, then
the challenged default judgment is not void.
{¶ 13} “The determination of whether service of process was sufficient in any
particular case rests on the factual evaluation by the court and is within the sound
discretion of the court.” C & W Invest. Co. v. Midwest Vending, Inc., 10th Dist. Franklin
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No. 03AP-40, 2003-Ohio-4688, ¶ 13. Given that the trial court took evidence and explicitly
ruled on the validity of service, it matters little at this point whether a presumption of
service never existed or, instead, whether Drake’s affidavit rebutted it.1
{¶ 14} While Drake insists that she never received service of process and that
Ciras provided no evidence of successful service, she largely ignores the trial court’s
contrary finding that, despite an incorrect address on the mailing envelope, the postal
service in fact delivered the summons and complaint to her correct address. In our view,
the key issue is whether the record supports this finding. We conclude that it does.
{¶ 15} At the evidentiary hearing, Drake testified that she has resided at 852 South
Columbus Street since the 1990s. Although EBC attempted certified-mail service at 825
South Columbus Street, which did not exist, Drake acknowledged in her motion to vacate
that the postal service had returned that service as “unclaimed” while correcting the
address. We find it significant that the summons and complaint were returned with the
house number “825” stricken through, with “852” written in its place, and with a notation
of “unclaimed” rather than “insufficient address,” “no such number/street,” or “not
deliverable as addressed,” which were other available options. Once again, an
“unclaimed” designation suggests that the intended recipient in fact may reside at the
designated address, and it supports attempted service by ordinary mail, which if
1 Regardless of whether a presumption of service never arose or whether Drake’s
affidavit rebutted it, under either scenario Ciras bore the burden of establishing that Drake
resided at the address to which service was delivered. Monogram Credit Card Bank of
Georgia v. Yoakum, 2d Dist. Montgomery No. 29533, 2023-Ohio-546, ¶ 8-9; see also
Horsley v. Essman, 145 Ohio App.3d 438, 444, 763 N.E.2d 245 (4th Dist.2001) (“We have
previously characterized the effect of rebutting the presumption as ‘bursting the bubble,’
with the case then proceeding as if the presumption had never arisen.”).
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unreturned in turn supports “a strong inference that the intended recipient received the
letter.” Thompkins, 115 Ohio St. 3d 409, 2007-Ohio-5238, 875 N.E.2d 582, at ¶ 23.
{¶ 16} Here the trial court reasonably inferred that the postal service had corrected
the transposed numbers on the ordinary-mail service attempted by EBC, just as the postal
service appears to have done with the attempted certified-mail service. Given Drake’s
lengthy period of residence at 852 South Columbus Street, it was not unreasonable to
believe her mail carrier likely knew where she lived, particularly in light of 825 South
Columbus Street being non-existent. Finally, the fact that the ordinary-mail service was
not returned further supported the trial court’s finding that EBC had served Drake
successfully despite transposing two numbers on the mailing envelope. For the foregoing
reasons, the evidence supports the trial court’s determination that valid service of process
was obtained.
{¶ 17} In opposition to our conclusion, Drake relies largely on Knickerbocker
Properties, Inc. v. Delaware Cty. Bd. of Revision, 119 Ohio St.3d 233, 2008-Ohio-3192,
893 N.E.2d 457, Clawson v. Hts. Chiropractic Physicians, LLC, 2d Dist. Montgomery No.
28632, 2020-Ohio-5351, reversed on other grounds, Ohio Slip Opinion No. 2022-Ohio-
4154, __ N.E.3d __, and Bank One Cincinnati, N.A. v. Wells, 1st Dist. Hamilton No. C-
950279, 1996 WL 526702 (Sept. 18, 1996).
{¶ 18} In Knickerbocker, the Ohio Supreme Court held that serving process at the
wrong address did not comport with constitutional due process, as it was not reasonably
calculated to provide notice of the proceeding. Knickerbocker is distinguishable in light of
the trial court’s determination that Drake was served at her correct address despite the
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error on the mailing envelope. In Clawson, this court held that any presumption of valid
service arising based on service at a prior address was rebutted by the defendant’s
affidavit swearing that he did not live at the address and did not receive service. Clawson
too is distinguishable from the present case. The central issue before us is whether the
record supports the trial court’s ultimate determination that EBC obtained residential
service on Drake, not whether Drake rebutted a presumption of valid service. Finally, in
Bank One the plaintiff directed service to an address where the defendant did not reside,
and the defendant never received service of process. Bank One is distinguishable given
the trial court’s finding below that EBC perfected service on Drake at her residence
despite its mailing error. In short, the case law Drake cites fails to persuade us that service
of process was invalid or that the challenged default judgment was void. Accordingly, the
first two assignments of error are overruled.
{¶ 19} Drake’s third assignment of error states:
C. THE TRIAL COURT ABUSED ITS DISCRETION WHEN IT
OVERRULED MRS. DRAKE’S MOTION TO VACATE THE DEFAULT
JUDGMENT AGAINST HER WHEN IT CONCLUDED MRS. DRAKE HAD
ACTUAL NOTICE BECAUSE, POST DEFAULT JUDGMENT, AN
ATTORNEY FILED A MOTION FOR 60(B) RELIEF AND MRS. DRAKE
FILED FOR BANKRUPTCY.
{¶ 20} In her third assignment of error, Drake contends post-judgment actions of a
defendant who was not properly served cannot be used to establish “actual knowledge”
of the lawsuit and thereby excuse a failure of service of process. Specifically, she claims
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the trial court erred in citing her post-judgment Civ.R. 60(B) motion and Chapter 13
bankruptcy filing as “verification” of “her receipt of the notice.”
{¶ 21} We find this assignment of error to be unpersuasive. As an initial matter,
Drake’s premise is wrong. The trial court did not cite her post-judgment actions to
establish her actual knowledge of the lawsuit to overcome a lack of service. As explained
above, the trial court explicitly found that valid service of process was obtained at Drake’s
residence despite an erroneous address on a mailing envelope. The trial court appears
to have mentioned the Civ.R. 60(B) motion and the bankruptcy action—both of which
were filed shortly after the default judgment—as additional corroborating evidence that
Drake in fact had received service of the summons and complaint.
{¶ 22} In the challenged portion of its ruling, the trial court did not even mention
Drake’s “actual knowledge” of EBC’s lawsuit. Instead, it reasoned that her “receipt of the
notice” was “verified” by the Civ.R. 60(B) motion and the bankruptcy filing. (Emphasis
added.) The trial court appears to have been saying that Drake’s receipt of the summons
and complaint was further corroborated by her post-judgment actions, which included
seeking Civ.R. 60(B) relief apparently based on grounds other than a lack of service of
process and by referencing EBC’s judgment in the bankruptcy action. In any event, the
trial court plainly did not purport to excuse a lack of valid service of process on the basis
that Drake had actual knowledge of EBC’s lawsuit. Accordingly, the third assignment of
error is overruled.
III. Conclusion
{¶ 23} Having overruled Drake’s assignments of error, we affirm the judgment of
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the Montgomery County Common Pleas Court.
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WELBAUM, P.J. and HUFFMAN, J., concur.