Spotsylvania Mall Co. v. Nobahar ( 2013 )

[Cite as Spotsylvania Mall Co. v. Nobahar, 2013-Ohio-1280.]
STATE OF OHIO, MAHONING COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
SPOTSYLVANIA MALL COMPANY ) CASE NO. 11 MA 82
)
PLAINTIFF-APPELLEE )
)
VS. ) OPINION
)
SYED NOBAHAR, et al. )
)
DEFENDANTS-APPELLANTS )
CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common
Pleas of Mahoning County, Ohio
Case No. 06 CV 3380
JUDGMENT: Reversed.
Default Judgment Vacated.
APPEARANCES:
For Plaintiff-Appellee, Atty. David A. Fantauzzi
Spotsylvania Mall Company: Atty. Ronald J. Yourstowsky
2445 Belmont Avenue
P.O. Box 2186
Youngstown, Ohio 44504-0186
For Defendant-Appellant, Ben Manesh: Atty. Matthew T. Anderson
Atty. Timothy M. Clayton, Jr.
Atty. David M. Scott
Luper Neidenthal & Logan
A Legal Professional Association
50 West Broad Street, Suite 1200
Columbus, Ohio 43215-3374
JUDGES:
Hon. Cheryl L. Waite
Hon. Gene Donofrio
Hon. Mary DeGenaro
Dated: March 27, 2013
[Cite as Spotsylvania Mall Co. v. Nobahar, 2013-Ohio-1280.]
WAITE, J.
{¶1} Appellant, Ben Manesh, signed a commercial lease with Appellee,
Spotsylvania Mall Company. Appellant had a co-signor on the lease, Syed Nobahar.
The lease designated a Maryland address be used for communications to Appellant
and Nobahar concerning the lease. Nobahar later requested that information
concerning the lease be sent to an address in Virginia. Appellant never provided an
address other than the Maryland address contained in the lease, and did not sign the
later request sent by Nobahar. When Appellee filed a collection action against both
Appellant and Nobahar, service was attempted only at the address provided by
Nobahar, in Virginia. The trial court subsequently granted default judgment against
Appellant alone, after Nobahar was released from liability in bankruptcy court.
Appellant claims that he only became aware of the lawsuit due to Appellee’s attempts
to collect the judgment which were served at his home address in Maryland.
Appellant contends that he never received service of the original complaint at any
address reasonably calculated to give him notice of the lawsuit.
{¶2} Appellee failed to explain why service to Appellant in Virginia was
reasonable, or to establish any connection between Appellant and the Virginia
address. Appellant denied receiving service at the Virginia address and never
appeared in the lawsuit. Under these circumstances, it was unreasonable for the trial
court to deny Appellant’s motion to vacate. The judgment of the trial court is
reversed, and the default judgment against Appellant is vacated.
Factual and Procedural History
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{¶3} The record in this case is particularly thin. This is partly because the
initial resolution of the lawsuit was through a default judgment. The subsequent
motion to vacate added little to the facts of the case. The record also lacks, as
Appellee notes, a transcript of the hearing on Appellant’s motion to vacate and the
exhibits introduced during that hearing. This omission is due to Appellant’s failure to
file the transcript or seek leave to file the transcript when he filed his objections to the
magistrate’s decision denying his motion to vacate. The evidentiary deficiency
extends beyond the subject matter of the hearing itself. Also absent is a copy of the
lease agreement that formed the basis of the complaint as well as the facsimile sent
by Nobahar that was alleged to have changed the address for service after the
execution of the lease. A thorough review of the record in the trial court reveals that
default judgment was granted despite the fact that Appellee never filed a copy of the
lease agreement. The record further discloses that after obtaining default judgment
on a contract it never produced, Appellee never remedied the omission. The lease
agreement or agreements may have been produced to the magistrate during the
hearing on the motion to vacate, however, because neither party filed a transcript of
the hearing or copies of the evidence used during the hearing, this material, apart
from a single clause included in the magistrate’s findings of fact, was not part of the
record before the trial court when ruling on Appellant’s objections to the magistrate’s
decision or when entering final judgment. Because this material was not provided to
the trial court it is not properly before us on appeal.
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{¶4} The facts that can be gleaned from the record as it comes before us
begin with Appellee Spotsylvania Mall Company’s complaint for money only, filed on
August 30, 2006. Appellee alleges in the complaint that it is the owner of property
leased by Appellant, Ben Manesh, and another man, Syed Nobahar. According to
Appellee the address for both men is 5610 Heritage Hills Circle, Fredericksburg,
Virginia, 22407. According to the complaint, copies of the lease or leases for two
units in the Spotsylvania Mall in Fredericksburg, Virginia, were not submitted with the
complaint because they were “voluminous” and would be “submitted to [the court]
prior to or at trial.” (8/30/06 Compl., ¶3.) Appellee did attach an accounting to the
complaint, itemizing the delinquent amounts for each property. The complaint
alleged, and the accounting reflected, damages initially totaling $40,795.03, a total
that would continue to increase until final judgment. The court ultimately awarded
Appellee $188,006.55 plus 18% interest to accrue until payment is made in full, and
all costs of the action. (4/27/11 J.E.)
{¶5} Both parties agree that Appellant and his co-defendant in the matter
below, Syed Nobahar, co-signed at least one commercial lease for property owned
by Appellee on July 9, 2004. Appellant claims ignorance of the lease terms, although
he concedes that he signed a lease. He also claims ignorance of the change of
address sent by Nobahar and has no knowledge of service of the complaint to the
Virginia address provided to Appellee by Nobahar. The complaint actually refers to
two leases. However, the parties, the magistrate, and the trial court subsequently
refer to a single lease. The parties agree that the lease or leases include a provision
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agreeing to the jurisdiction of Mahoning County courts for all disputes arising out of
the lease terms. The parties agree, and the magistrate’s findings of fact adopted by
the trial court confirm that the lease required Appellant and Nobahar to designate an
address for all communications pertaining to the lease and established a procedure
for changing that address. (4/27/11 J.E., p. 2.) According to the magistrate’s findings
of fact adopted by the trial court, the lease specifies 401 Stone Mason Drive,
Gaithersburg, Maryland, 20878, as the address for both Appellant and Nobahar.
(4/27/11 J.E., p. 2.) According to Appellee and the magistrate’s findings of fact, on
October 13, 2005 Appellee received a facsimile seeking to change the designated
address from the original Maryland address to 5610 Heritage Hills Circle,
Fredericksburg, Virginia, 22407. (4/27/11 J.E., p. 2.) Appellee admits that this notice
was faxed from and signed by Nobahar, but not Appellant. (4/27/11 J.E., p. 2.)
According to Appellant, he had no knowledge of the facsimile and has no connection
to the address in Fredericksburg. All parties agree that, although the facsimile did
not comply with the procedure designated in the lease for a change of address,
Appellee used the Virginia address provided by Nobahar for all subsequent
communications concerning the lease.
{¶6} On September 7, 2006, service of the complaint was initially attempted
via certified mail to both Appellant and Nobahar at 5610 Heritage Hills Circle,
Fredericksburg, Virginia, 22407, the change of address provided by Nobahar, alone.
On October 4, 2006, both pieces of certified mail were returned by the U.S. Post
Office to the Clerk of Courts as unclaimed. Appellee then requested, pursuant to
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Civ.R. 4.6(D), that service to both parties be reissued via regular mail, to the same
Fredericksburg, Virginia, address. Service via regular mail was completed by the
clerk on October 6, 2006, and a certificate of mailing was entered on the docket by
the clerk the same day. There is no indication in the record that service via regular
mail to the Fredericksburg address was returned. Nothing further appears in the
docket pertaining to service of the complaint. The next docket entry is a suggestion
of bankruptcy, filed by Appellee on behalf of Nobahar, on March 20, 2007. The
certificate of service indicates that this filing was sent to both Nobahar and allegedly
to Appellant, again to the Fredericksburg address. The trial court stayed the matter
due to Nobahar’s Chapter 7 filing on March 22, 2007.
{¶7} The trial court granted Appellee’s motion to return the case to the active
docket on April 4, 2008, and specifically noted that proceedings would continue
against Appellant, alone, as Nobahar had received a discharge in bankruptcy. No
certificate of service accompanied Appellee’s April 3, 2008 motion to return the case
to the active docket.
{¶8} Appellee filed a motion for default judgment on May 19, 2008. Without
explanation, this motion was sent to Appellant at 9901 Potomac Manors Drive,
Potomac, Maryland, 20854, rather than the Fredericksburg address used for every
other document in the lawsuit to date. Appellee attached a new statement of account
and supporting affidavit to the motion, as well as an affidavit verifying that Appellant
was not in active military service, in compliance with the Servicemembers Civil Relief
Act. Appellee did not attach to the motion, or separately file, a copy of the lease
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agreement(s). Despite the fact that the lease was never properly filed with the court,
the trial court granted default judgment against Appellant for $188,006.55, plus
interest and the costs of the lawsuit, on July 10, 2008. Between the May 19, 2008
motion for default judgment and the July 10, 2008 entry granting default judgment no
additional filings appear of record. Between the filing of the complaint on August 30,
2006 and the decision granting default judgment on June 12, 2009, Appellant never
answered the complaint or otherwise appeared in the lawsuit.
{¶9} On June 12, 2010, a year after default judgment was granted, Appellee
took steps to collect on the judgment. Appellee began by filing a praecipe for
authentication of judgment. Nothing appears in the record between the June 12,
2010 praecipe and Appellant’s first entries on the docket, filed on December 3, 2010,
which included a motion to reactivate the case and a hybrid motion to vacate the
judgment and for stay of execution. According to Appellant’s motions, and the copy
of an affidavit attached to the motion to vacate (no original document appears in the
file), Appellant was never served with the underlying complaint and was unaware of
the lawsuit until Appellee began collection attempts. Appellant also alleged that he
had never “maintained a habitual, continuous or highly continual and repeated
physical presence at 5160 Heritage Hills Circle, Fredericksburg, VA 22407,” the
address provided solely by Nobahar and which was used by Appellee to allegedly
obtain service of the complaint. (12/3/10 Motion Exh., Manesh Aff., ¶4.)
{¶10} Appellee responded to Appellant’s motion to vacate by detailing its
collection efforts through the Maryland courts. Appellee discusses only collection
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efforts, all of which reflect attempted service at the Potomac, Maryland address, not
the original Gaithersburg address specified in the lease, or the Fredericksburg,
Virginia, address where service was originally alleged to have been made and all
documents prior to the motion for default judgment were sent. Appellant’s motion to
vacate was set for a hearing before the magistrate on February 3, 2011 and leave
was granted by the magistrate until February 17, 2011 to allow Appellant to file a
supplemental memorandum. In his memorandum, Appellant challenged service
based on the terms of section 22 of the lease agreement, which was later quoted, at
least in part, in the magistrate’s decision. This section apparently contains the
procedure to change an address for notice purposes under the lease. The full lease
agreement, however, was not attached to the memorandum. The magistrate’s
decision denying Appellant’s motion to vacate was filed on March 3, 2011.
Appellant’s objections to the decision were timely filed on March 16, 2011. As earlier
noted, no transcript of the hearing was filed with Appellant’s objections and no motion
for an order granting an extension of time to file the transcript appears in the record.
No additional exhibits or transcripts were filed by either party.
{¶11} The trial court held a hearing on Appellant’s objections to the
magistrate’s decision on April 19, 2011. On April 27, 2011, the trial court overruled
Appellant’s objections and adopted the magistrate’s findings of fact and conclusions
of law in their entirety. On May 20, 2011 Appellant filed this timely appeal from the
April 27, 2011 entry of judgment.
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{¶12} On June 6, 2011, nearly two months after the trial court’s ruling and
approximately two weeks after Appellant filed his notice of appeal, a transcript of the
February 4, 2011 hearing and accompanying exhibits were filed to this Court. The
transcript was endorsed by the court reporter on June 6, 2011. The date of filing, the
date of the reporter’s signature, and the accompanying statement by the reporter
clearly reflect that the transcript and attached exhibits were not filed with the trial
court prior to the court’s April 27, 2011 ruling adopting the magistrate’s decision and
were instead filed for the first time in the court of appeals. (Notice of filing transcript
of proceedings on appeal with exhibits, June 6, 2011).
{¶13} The record also contains three blue assignment notice envelopes, all of
which were returned by the U.S. Postal Service as addressee not known, unable to
forward. The first two assignment envelopes were sent on May 30, 2008 and appear
to have contained the trial court’s May 29, 2008 notice of assignment of a July 9,
2008 hearing on the motion for default. It is unclear to what address these notices
were sent, but “Don’t live here anymore” is handwritten across both under the U.S.
Post Office’s “attempted-not known” notice and the two envelopes were returned by
the U.S. Post Office to the court on June 10, 2008. A third assignment notice
envelope, apparently containing the trial court’s January 6, 2011 notice of
assignment for the February 7, 2011 hearing on Appellee’s motion to reactivate the
case, is also endorsed “Don’t live here,” and was returned by the U.S. Post Office as
“attempted not known” on January 10, 2011.
Argument and Law
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Assignment of Error
THE TRIAL COURT ERRED IN ADOPTING THE MAGISTRATE’S
DECISION DENYING MANESH’S MOTION TO VACATE JUDGMENT.
{¶14} A trial court’s decision to deny a motion to vacate judgment is reviewed
on appeal for an abuse of discretion whether that motion is made pursuant to Civ.R.
60(B) or to the court’s inherent power at common law to vacate a void judgment.
GTE Automatic Elec., Inc., v. ARC Industries, Inc., 47 Ohio St.2d 146, 150, 351
N.E.2d 113 (1976) (“[h]aving found that the order of the trial court [granting the
motion to vacate judgment] was a final order, we may now proceed to the question of
whether the making of the order was an abuse of discretion”) and Terwoord v.
Harrison, 10 Ohio St.2d 170, 171, 757 N.E.2d 362 (1967) (because the trial court
order overruled a motion to vacate default judgment “the trial court had the inherent
right, founded upon the common law, to sustain or overrule the motion to vacate that
judgment” and the appellate court “in ruling on the propriety or impropriety of that
order, had only to rule upon the limited question of whether or not the trial judge
abused his discretion in refusing to vacate the order”). “It is axiomatic that for a court
to acquire jurisdiction there must be a proper service of summons or an entry of
appearance, and a judgment rendered without proper service or entry of appearance
is a nullity and void.” Lincoln Tavern, Inc. v. Snader, 165 Ohio St. 61, 64 (1956) “[A]
trial court is without jurisdiction to render a judgment or to make findings against a
person who was not served summons, did not appear, and was not a party in the
court proceedings. A person against whom such judgment and findings are made is
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entitled to have the judgment vacated.” State ex rel Ballard v. O’Donnell, 50 Ohio
St.3d 182, 184, 553 N.E.2d 650 (1990). “The authority to vacate a void judgment is
not derived from Civ. R. 60(B) but rather constitutes an inherent power possessed by
Ohio courts.” Patton v. Diemer, 35 Ohio St.3d 68, 518 N.E.2d 941 (1988), paragraph
four of the syllabus.
{¶15} Abuse of discretion connotes more than an error of judgment; it implies
that the court's attitude was unreasonable, arbitrary, or unconscionable. Blakemore v.
Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983). “When applying the
abuse of discretion standard, a reviewing court is not free to merely substitute its
judgment for that of the trial court.” In re Jane Doe 1, 57 Ohio St.3d 135, 137-138,
566 N.E.2d 1181 (1991). “The term discretion itself involves the idea of choice, of an
exercise of the will, of a determination made between competing considerations. In
order to have an ‘abuse’ in reaching such determination, the result must be so
palpably and grossly violative of fact and logic that it evidences not the exercise of
will but perversity of will, not the exercise of judgment but defiance thereof, not the
exercise of reason but rather of passion or bias.” Huffman v. Hair Surgeon, Inc., 19
Ohio St.3d 83, 87, 482 N.E.2d 1248, 1252 (1985).
{¶16} The motion to vacate judgment in this instance was initially heard by a
magistrate. An appeal filed from a trial court’s decision adopting a magistrate’s
decision is also subject to the same abuse of discretion standard. Where, as here,
the “party objecting to a referee’s report has failed to provide the trial court with the
evidence and documents by which the court could make a finding independent of the
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report, appellate review of the court's findings is limited to whether the trial court
abused its discretion in adopting the referee’s [decision].” State ex rel. Duncan v.
Chippewa Twp. Trustees, 73 Ohio St.3d 728, 730, 654 N.E.2d 1254 (1995). A
party’s failure to provide the trial court with the transcript or other evidence prevents
this Court from considering any transcript submitted with the appellate record. Id.“[W]here the objecting party fails to provide the trial court with the transcript of the
proceedings before the magistrate, the appellate court is precluded from considering
the transcript” submitted with the appellate record because “[a] reviewing court
cannot add matter to the record before it, which was not a part of the trial court's
proceedings, and then decide the appeal on the basis of the new matter.” State ex
rel. Duncan and State v. Ishmail, 54 Ohio St.2d 402, 337 N.E.2d 500 (1978),
paragraph one of syllabus. An appeal under these circumstances limits the appellate
court review to “whether the trial court's application of the law to its factual findings”
was an abuse of discretion. State ex rel. Duncan at 730.
{¶17} In order to meet the “standard of due process, first enunciated in
Mullane v. Central Hanover Bank & Trust Co.,” service of the summons and
complaint required to initiate a lawsuit must satisfy “[a]n elementary and fundamental
requirement of due process,” which is, “notice reasonably calculated, under all the
circumstances, to apprise interested parties of the pendency of the action and afford
them an opportunity to present their objections.” (Emphasis deleted.) Samson
Sales, Inc. v. Honeywell, Inc., 66 Ohio St.2d 290, 293, 421 N.E.2d 522 (1981) and
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Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 94
L.Ed. 865 (1950).
{¶18} The mechanics of service to an out-of-state party is governed by Civ.R.
4.3: Process: Out-of-State Service
When service permitted. Service of process may be made outside of
this state, as provided in this rule, in any action in this state, upon a
person who, at the time of service of process, is a nonresident of this
state * * * ‘Person’ includes an individual, an individual’s executor,
administrator, or other personal representative, or a corporation,
partnership, association, or any other legal or commercial entity who,
acting directly or by an agent, has caused an event to occur out of
which the claim that is the subject of the complaint arose, from the
person’s:
***
Methods of service.
Service by certified or express mail. Evidenced by return receipt
signed by any person, service of any process shall be by certified or
express mail unless otherwise permitted by these rules. The clerk shall
place a copy of the process and complaint or other document to be
served in an envelope. The clerk shall address the envelope to the
person to be served at the address set forth in the caption or at the
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address set forth in written instructions furnished to the clerk with
instructions to forward.
{¶19} In addition to the service specified by Civ.R. 4.3(B)(1), which prescribes
service by certified or express mail, but also allows service “otherwise permitted by
these rules,” Civ.R. 4.6 provides options where service is refused or unclaimed:
Service unclaimed. If a certified or express mail envelope is returned
with an endorsement showing that the envelope was unclaimed, the
clerk shall forthwith notify, by mail, the attorney of record * * * If the
attorney, or serving party, after notification by the clerk, files with the
clerk a written request for ordinary mail service, the clerk shall send by
ordinary mail a copy of the summons and complaint or other document
to be served to the defendant at the address set forth in the caption, or
at the address set forth in written instructions furnished to the clerk.
The mailing shall be evidenced by a certificate of mailing which shall be
completed and filed by the clerk. * * * Service shall be deemed
complete when the fact of mailing is entered of record, provided that the
ordinary mail envelope is not returned by the postal authorities with an
endorsement showing failure of delivery. If the ordinary mail envelope
is returned undelivered, the clerk shall forthwith notify the attorney, or
serving party, by mail.
{¶20} The significance of the service requirement cannot be understated and
it is clear that even if a defendant becomes aware of a suit against him through other
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means or at some later stage in the suit, unless service has been properly made or
the party has otherwise waived service by appearing in the lawsuit, no judgment may
be entered against him. Maryhew v. Yova, 11 Ohio St.3d 154, 157, 464 N.E.2d 538(1984). “Inaction upon the part of a defendant who is not served with process, even
though he might be aware of the filing of the action, does not dispense with the
necessity of service.” Haley v. Hanna, 93 Ohio St. 49, 52, 112 N.E. 149 (1915).
{¶21} As a preliminary matter, Appellant’s argument that service cannot be
perfected on an out-of-state party via regular mail is incorrect. Appellant attempts to
create an ambiguity in Civ.R. 4.3 that ignores the text of the rule, which explicitly
allows service “otherwise permitted by these rules.” Civ.R. 4.3(B)(1). When service
is unclaimed or refused, as opposed to undeliverable, the Civil Rules allow service by
regular mail, and deem service complete only where the regular mail is not returned
as undeliverable. Civ.R. 4.6(D). Challenges to the mechanics prescribed by the Civil
Rules for service by regular mail on an out-of state party are infrequent, but in the last
thirty years, every Ohio district court that has considered the issue has found service
via regular mail to be proper. Examples include, but are not limited to, J.R.
Productions, Inc. v. Young, 3 Ohio App.3d 407, 409 44d N.E.2d 740 (10th Dist.1982)
(“In other words, Civ. R. 4.6(D) is a specific provision applicable when a certified mail
envelope is returned with an endorsement of ‘unclaimed’” and is proper for out-of-
state service where the requirements of Civ.R. 4.6 are met); also State ex rel. Scioto
Cty. Dept. of Human Servs. v. Proctor, 2005-Ohio-1581, ¶13 (4th Dist.) (“service of
process on an out-of-state defendant can be perfected when certified mail is
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unclaimed by either filing the affidavit described in Civ.R. 4.3(B) or serving the
defendant by ordinary mail as contemplated in Civ.R. 4.6(D)” (Emphasis deleted.));
and Ferrie v. Ferrie, 2 Ohio App.3d 122, 124, 440 N.E.2d 1229 (9th Dist.1981) (when
serving an out-of-state party after certified mail was unclaimed, “appellee’s use of
Civ. R. 4.6(D) is fully authorized by the Rules of Civil Procedure and was proper in
this case”).
{¶22} The Supreme Court has not explicitly ruled on the issue, but that
Court’s recent change to Civ.R. 4.3, effective July 1, 2012, comports with the
conclusion reached by the various district courts who have ruled on the issue. The
new version of the rule is not applicable to the current matter, but the consensus of
the various districts as to the interaction between the prior versions of Civil Rules 4.3
and 4.6 is persuasive. It is clear that the mechanics of service in this matter were
correct. Of note here, however, is the rule that, in order for service via regular mail to
satisfy due process, the address Appellant used for service must still be “reasonably
calculated, under all the circumstances, to apprise interested parties of the pendency
of the action and afford them an opportunity to present their objections.” Mullane,
supra, at 314.
{¶23} According to the material that appears in the record, and to the findings
adopted by the trial court, Appellant and another man, Syed Nobahar, signed a
lease. Because no party has provided evidence of the complete terms of the
agreement, we are bound by the facts pertaining to the lease as they appear in the
magistrate’s decision adopted by the trial court on April 27, 2011. According to those
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findings, the lease required that Appellant and Nobahar provide an address for
receipt of all communications pertaining to the lease. Service was not sent to this
address. According to Appellee’s own admission, a second address was provided to
Appellee by Nobahar, not Appellant, for communications pertaining to the lease. The
notice was apparently not provided pursuant to lease provisions for a change of
address. Appellee admits that the notice was signed by Nobahar, but not by
Appellant. Nothing in the record connects Appellant to the notice containing this
changed address. Nothing in the record connects Appellant to the address itself.
Nothing in the record before us provides evidence of what, if any, legal relationship
may exist between Nobahar and Appellant to allow service by proxy or to authorize
Nobahar to change the address on behalf of both parties. Although Appellee claimed
during oral argument that the terms of the lease made service on one party sufficient
for both, Appellee failed to produce any evidence of such a clause in the record
below. Service to the Fredericksburg address provided by only Nobahar was
unclaimed. Service was never attempted to any other address. Appellant never
responded to the lawsuit or appeared in the record. A default judgment motion was
filed, and Appellant never responded or appeared in the record. When Appellant
filed his motion to vacate on December 3, 2010, he attached a copy of an affidavit
averring that he never received service.
{¶24} It is not necessary to apply the rules governing service to a place of
business in this instance, because nothing in the record suggests that the
Fredericksburg address was Appellant’s, or in fact Nobahar’s, place of business.
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While there is a suggestion that the changed address referred to the location of the
leased premises, Appellee has not produced, and the trial court did not find, a single
connection in the record between Appellant and the Fredericksburg address provided
by Nobahar. Even if there was evidence that the leased premises was located in
Fredericksburg, there is still no evidence that Appellant had any connection to this
address other than his apparent agreement to the terms of the lease. Nothing in the
record justifies a presumption that Appellant could be served at that address.
Appellee’s emphasis on Appellant’s subsequent behavior after default was granted
and denials of service at a third address when collection was later sought is
misplaced. Absent appropriate service of the complaint, a party is not obligated to
participate in or otherwise even acknowledge a legal proceeding is taking place.
Appellant’s subsequent behavior is irrelevant to Appellee’s burden to meet the
threshold requirement that initial service of process be made at an address
reasonably calculated to give the party notice. Appellee has failed to introduce any
evidence on the record that establishes a connection between Appellant and the
address where service was attempted that would support the conclusion that service
to that address was reasonably calculated to give notice pursuant to Civ.R. 4.
{¶25} Assuming Appellant was actively avoiding service of Appellee’s
collection attempts at the Potomac, Maryland address, nothing, short of waiver, can
excuse the basic due process requirement that Appellee was first required to obtain
service of the complaint. The lack of any evidence connecting Appellant in any way
to the Fredericksburg address coupled with the admitted facts surrounding the
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attempts at service negate the presumption that service to Appellant was complete at
that address. The trial court’s finding that Appellant was not credible when he
claimed he did not receive service at the Fredericksburg address because he also
denied that he later received service of the motion for default judgment at his
(apparent) home address is unreasonable. Had the record demonstrated a sufficient
connection between Appellant and the Fredericksburg address, had service of the
complaint been made to the address provided in the lease, or had service of the
complaint been attempted at what may be Appellant’s home in Potomac, Maryland
that Appellee used when seeking to collect its judgment, Appellee would have a
stronger case that default judgment was appropriate. However, the record as it
comes to this Court offers no support for the conclusion that such judgment was
warranted, here. While the trial court may appropriately make findings as to
Appellant’s credibility, subsequent denial of service during collection procedures does
not effect failure of service on the underlying complaint. The facts before us do not
establish that service on the complaint was properly sought or obtained against
Appellant. The trial court’s decision to adopt the magistrate’s decision was an abuse
of discretion. Accordingly, Appellant’s assignment of error is sustained. The decision
of the trial court denying Appellant’s motion to vacate is reversed and the trial court’s
default judgment against him is vacated.
Conclusion
{¶26} Appellant’s single assignment of error is sustained. Because no
evidence of a connection between Appellant and the Fredericksburg address used
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for attempted service of the complaint appears in the record, it was unreasonable for
the trial court to conclude that service had been perfected on Appellant. The trial
court’s decision denying Appellant’s motion to vacate is reversed and the trial court’s
judgment entry granting default judgment against Appellant is hereby vacated.
Donofrio, J., concurs.
DeGenaro, P.J., dissents; see dissenting opinion.
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DeGenaro, P.J., dissenting.
{¶27} While I concur with the majority’s analysis regarding the propriety of the
mechanism of service used in this case, I dissent from the conclusion that service
was not perfected against Appellant. Given the scant nature of the record and the
procedural posture of this appeal, Appellant’s ability to make his case that it was error
as a matter of law to deny his motion to vacate the default judgment is constrained.
Moreover, these two factors dictate a very narrow issue to be tested by our standard
of review. Based upon the paucity of the record, we cannot adequately test whether
the trial court abused its discretion by overruling Appellant’s objections to the
Magistrate’s Decision. Rather, we must presume the regularity of those proceedings.
Accordingly, the judgment of the trial court should be affirmed.
{¶28} The majority and I differ on how to apply the United States Supreme
Court holding in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70
S.Ct. 652, 94 L.Ed. 865 (1950), to the facts of this case; specifically, whether the
address used by Appellee was “reasonably calculated” to provide Appellant with
notice of the Complaint. Resolution of this issue is fact-driven by necessity; what is
reasonable in one case may not be in another. This raises another analytical
distinction. As a matter of Ohio law, in the absence of a transcript the court of
appeals must presume sufficient evidence was presented to the trial court to support
its decision. Here, the majority has done the opposite, presuming insufficient
evidence was presented.
{¶29} The majority correctly notes the record is very limited here in the first
instance; for example, it is unclear from the record whether the lease was filed with
the trial court before default judgment was granted. That the lease was not properly
before the trial court was detrimental to Appellant’s argument contained in his
objections before the trial court and fatal to his argument on appeal, as will be
discussed below. However, the complaint was for money damages only, and the
absence of the lease, while sloppy litigation practice, was not fatal to Appellee here
as the majority has concluded. The record reveals there was a hearing before the
trial court on the motion for default judgment on July 9, 2008 where evidence was
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presumably presented, including the lease. However, Appellant has failed to file that
transcript. We do know the lease was presented at the hearing before the magistrate
on Appellant’s motion to vacate; however, we cannot consider the substance of that
document, aside from what the magistrate notes in his findings of fact.
{¶30} But I differ with the majority in the presumptions that can be made in
light of this evidentiary gap. “When portions of the transcript necessary for resolution
of assigned errors are omitted from the record, the reviewing court has nothing to
pass upon and thus, as to those assigned errors, the court has no choice but to
presume the validity of the lower court's proceedings, and affirm.” Knapp v. Edwards
Laboratories, 61 Ohio St.2d 197, 199, 400 N.E.2d 384, 385 (1980).
{¶31} The majority has done the opposite; in effect presuming from the lack of
a transcript that evidence in support of certain factual matters was not presented by
Appellee, and vacating the default judgment for that reason. Pursuant to Knapp’s
directive, we must presume sufficient evidence was presented to support the initial
default judgment as well as the Magistrate’s finding that Appellant was properly
served; that as a matter of law the Fredericksburg Virginia address was reasonably
calculated to provide notice. Mullane, supra.
{¶32} The procedural posture of the case controls from which party’s
perspective we review the record; specifically, which party bears the burden of proof.
The default judgment was not appealed. This matter is before us on Appellant’s
motion to vacate a judgment, first heard by a magistrate, and then by the trial court
hearing Appellant’s objections, and denying the motion. On appeal, Appellant argues
that the magistrate and the trial court abused their discretion by denying a motion to
vacate a judgment, not in granting judgment in the first instance. This is a subtle but
fundamental difference, because it dictates how broadly or narrowly this court
reviews the discretion exercised by the trial court. Coupled with the inadequacy of
the record filed with this court by Appellant, our standard of review is particularly
constrained in this case. The issue before us is a narrow one: whether the trial court
abused its discretion by overruling Appellant’s objections and denying the motion to
vacate. State ex rel. Duncan, supra.
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{¶33} Appellant failed to provide the trial court with, at a minimum, the
transcript of the hearing before the magistrate, including admitted exhibits. The
transcript from the default judgment hearing has not been included in the record as
well. This makes it virtually impossible for this court to measure whether the trial
court abused its discretion in determining as a matter of law that service was proper
as contemplated by Mullane. Thus, Knapp dictates we presume the regularity of the
proceedings before the magistrate.
{¶34} Reliance on Appellant’s self-serving affidavit to find the trial court
abused its discretion is inapposite. There was a full evidentiary hearing on the
motion to vacate before the magistrate, who found Appellant’s testimony “not
credible.” We simply do not know what the other terms of the lease provided with
respect to notice; e.g., whether the notice provisions of the lease quoted in the
Magistrate’s Decision can be waived; or whether one co-tenant’s statement regarding
a change of address can bind the other. We do not know whether correspondence,
rent payments and the like between the parties originated from or were sent to the
Fredericksburg Virginia address, which would be another factual consideration
relevant to whether service was reasonably calculated pursuant to Mullane.
Moreover, counsel conceded that Appellant and the discharged defendant were
partners. This raises a whole host of factual and legal issues that need to be
resolved when considering the motion to vacate. Given Appellant’s failure to provide
a sufficient record for us to review, we must resolve ambiguities or gaps in the record
by presuming the regularity of the proceedings before the magistrate.
{¶35} What is properly in the record for appellate review are the various
exhibits filed by Appellee in opposition to Appellant’s Motion to Vacate Default
Judgment and a transcript of the hearing before the trial court on Appellant’s
objections. At that hearing, counsel for Appellant argued that Appellant’s affidavit (a
photocopy, no original was filed as a part of the record) denying service of the
complaint was uncontroverted, and pursuant to Russell v. Rooney, 7th Dist. No. 88
CA 80, 1989 WL 27779 (Mar. 23,1989), that alone defeats service. However, as
noted above, there was a full evidentiary hearing at which Appellee did challenge
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Appellant’s claim that he did not receive the Complaint, and in fact, the magistrate
found that denial incredible. The trial court’s and our standard of review of factual
findings by the magistrate is limited precisely because neither court has the benefit of
viewing the testimony of the witnesses in the manner the trier of fact did, in this
instance the magistrate. Without the benefit of reading the transcript, neither the trial
court, nor this court can say the magistrate abused his discretion by concluding
service was proper. To let a one-dimensional, self-serving affidavit factually trump
live testimony subject to cross-examination is problematic. It would create case law
in this district permitting a defendant to collaterally attack and defeat a valid default
judgment, rather than defending it in the first instance, or filing a direct appeal of that
judgment. To permit this collateral attack would also negatively impact the principle
of the finality of judgments.
{¶36} In conclusion, it is incumbent upon Appellant to provide a sufficient
record to the trial court to address his objections, and to this court to address the
assigned error. Here, Appellant failed to do so. Further, the procedural posture of
the case placed the burden of proof on the motion to vacate upon Appellant.
Whether the Fredericksburg Virginia address was “reasonably calculated” to provide
Appellant with notice of the Complaint, as contemplated by Mullane, is necessarily
driven by the facts; what is reasonable in one case may not be in another. Given
Appellant’s failure to provide a sufficient record for us to review, we must resolve
ambiguities or gaps in the record by presuming the regularity of the proceedings
before the magistrate. Thus, the decision of the trial court should be affirmed.