Perkins v. Nocum , 2011 Ohio 4167 ( 2011 )

[Cite as Perkins v. Nocum, 2011-Ohio-4167.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF MEDINA )
MAUREEN PERKINS C.A. No. 10CA0098-M
Appellee
v. APPEAL FROM JUDGMENT
ENTERED IN THE
MARGUERITE NOCUM, et al. COURT OF COMMON PLEAS
COUNTY OF MEDINA, OHIO
Appellant CASE No. 07CIV1095
DECISION AND JOURNAL ENTRY
Dated: August 22, 2011
BELFANCE, Presiding Judge.
{¶1} Robert Klooz appeals from the trial court’s denial of his motion to vacate a
default judgment. For the reasons set forth below, we reverse.
I.
{¶2} In July 2007, Maureen Perkins filed an action against multiple defendants,
including Mr. Klooz. This was her second action against these defendants, having voluntarily
dismissed the original action in May 2007. In both complaints, she stated claims for fraud, that
the defendants had breached a real estate sales agreement, engaged in deceptive sales acts, and
breached express and implied warranties. In that earlier action, Mr. Klooz, after being served
with the complaint, had written a letter to Ms. Perkins’ counsel, stating that he had cleaned the
septic tank on November 11, 2003, and that his job entailed working with just the tank and not
the entire system. He also informed Ms. Perkins’ counsel that he only dealt with the previous
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owner of the home. He concluded the letter by saying, “Should you require additional
information, please contact me.”
{¶3} Mr. Klooz did not respond to the second complaint, and Ms. Perkins moved for a
default judgment against Mr. Klooz on September 26, 2008. The trial court entered a judgment
against Mr. Klooz on October 22, 2008, and it found that Ms. Perkins was entitled to $50,250 in
compensatory damages, $50,250 in punitive damages, and $33,500 in attorney fees. Mr. Klooz
was not present at this hearing, and, apparently, no record of the proceedings was made.
According to Mr. Klooz, Ms. Perkins’ counsel never contacted him about the default judgment
until October 23, 2009.
{¶4} Mr. Klooz filed a Civ.R. 60(B) motion to vacate the default judgment on
November 25, 2009, in which he argued that his motion was timely, that he had a meritorious
defense, and that he was entitled to relief under Civ.R. 60(B)(5). After learning that the journal
entry for his default judgment was not a final appealable order, he filed a supplemental
memorandum in which he argued that his motion had come within a year of the actual final
judgment and, therefore, he was also entitled to relief under Civ.R. 60(B)(1) and (3). The trial
court denied his motion, determining that, while it was timely, Mr. Klooz failed to demonstrate
excusable neglect. Mr. Klooz has appealed, alleging four assignments of error. As the
resolution of Mr. Klooz’s third assignment of error is dispositive, we address it first.
II.
ASSIGNMENT OF ERROR III
“THE TRIAL COURT ABUSED ITS DISCRETION IN ITS DENIAL OF THE
DEFENDANT’S MOTION FOR RELIEF FROM JUDGMENT BROUGHT
PURSUANT TO OHIO RULE OF CIVIL PROCEDURE 60(B)(5)
REFERENCING A DEFAULT JUDGMENT ENTERED BY THE TRIAL
COURT AS THE APPELLANT DESERVED SUCH RELIEF IN THE
INTERESTS OF JUSTICE AND EQUITY.”
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{¶5} Mr. Klooz argues that the trial court should have granted his Civ.R. 60(B) motion
because he was entitled to relief pursuant to Civ.R. 60(B)(5) and he satisfied the other elements
required for relief. 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, paragraph two of the syllabus.
“Where timely relief is sought from a default judgment and the movant has a meritorious
defense, doubt, if any, should be resolved in favor of the motion to set aside the judgment so that
cases may be decided on their merits.” Id. at paragraph three of the syllabus.
{¶6} Civ.R. 60(B) provides that:
“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.”
Civ.R. 60(B)(5) reflects “the inherent power of a court to relieve a person from the unjust
operation of a judgment.” State ex rel. Gyurcsik v. Angelotta (1977), 50 Ohio St.2d 345, 346.
“The grounds for invoking Civ.R. 60(B)(5) should be substantial.” Caruso-Ciresi, Inc. v.
Lohman (1983), 5 Ohio St.3d 64, paragraph two of the syllabus. A trial court’s decision on a
Civ.R. 60(B) motion is reviewed for an abuse of discretion. Strack v. Pelton (1994), 70 Ohio
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St.3d 172, 174. An abuse of discretion “implies that the court’s attitude is unreasonable,
arbitrary or unconscionable.” Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219.
{¶7} The trial court determined that Mr. Klooz’s Civ.R. 60(B) motion was timely, a
determination that has not been disputed by Ms. Perkins. Thus, our focus is upon the remaining
elements required under GTE Automatic.
{¶8} This Court has previously addressed a similar issue in Ross v. Shively, 9th Dist.
No. 23719, 2007-Ohio-5118. In Ross, Martha Ross filed an action against the driver of the car
that struck her, Progressive Insurance, State Farm Insurance, and United Healthcare. Id. at ¶3.
Ms. Ross had been covered by her husband’s employer-provided insurance provider, which was
United Healthcare, and it had covered a portion of her medical expenses. Id. at ¶2. She sought a
judgment “‘against the Defendants, jointly and severally, in excess of Twenty-Five Thousand
Dollars ($25,000), together with costs and expenses incurred therein.’” Id. at ¶4. United
Healthcare did not respond to the complaint, and the trial court entered a default judgment
against United Healthcare. Id. United Healthcare moved to vacate the judgment under Civ.R.
60(B)(5), but the trial court denied the motion. Id.
{¶9} On appeal, this Court noted that, while “a default judgment may be entered
[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or
otherwise defend as provided by these rules[,] * * * default judgment is improper when the
complaint fails to state a claim against the defendant.” (Internal citations and quotations
omitted.) Id. at ¶¶9-10; see, also, Civ.R. 55(A). For this reason, this Court recognized that “[t]he
improper entry of default judgment constituted substantial grounds for relief from judgment
pursuant to Civ.R. 60(B)(5) [when] the default judgment subjected [the defendant] to liability on
claims that were not asserted.” Ross at ¶14.
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{¶10} Ms. Ross’s complaint only contained a single reference to United Healthcare:
“‘At all times relevant hereto, Plaintiff CHARLES L. ROSS, husband of Plaintiff,
MARTHA A. ROSS, had medical and hospitalization coverage with the
Defendant, UNITED HEALTHCARE SERVICES, through his employer, that
made certain payments for the Plaintiff, MARTHA A. ROSS, as and for medical
and hospitalization services, claiming that they have expended the sum of
$17,539.96 for said services to date.’” Id. at ¶12.
“Although the prayer for damages stated that Mr. & Mrs. Ross demanded judgment against ‘all
defendants,’ the complaint did not allege any liability on the behalf of United Healthcare * * *.
By failing to answer the complaint, therefore, United Healthcare conceded only that it provided
health insurance coverage to Mrs. Ross through her husband’s employer and that it claimed to
have expended $17,539.96 for her care and treatment.” Id. at ¶13. Accordingly, this Court
concluded that the trial court had abused its discretion when it denied United Healthcare’s
motion.
{¶11} In Ms. Perkins’ complaint, she alleged, “[Mr.] Klooz is the owner and operator of
Klooz Septic Service operating under the laws of the state of Ohio as a sole proprietorship. [Mr.]
Klooz performed service on the septic system of the real estate that is the subject of this litigation
on an every-other-year basis.” She also alleged that, “[o]n October 31, 2003[,] [Joseph] Guthrie
presented evidence to [Ms. Perkins] that the septic tank was scheduled to be pumped by [Mr.]
Klooz on November 11, 2003, and that [Mr.] Klooz cleaned the tank every two years.” Ms.
Perkins never alleged that she had a contract with Mr. Klooz, that he represented anything to her,
or even that he did not empty the septic tank.
{¶12} By not responding to her complaint, Mr. Klooz merely admitted that he was the
owner and operator of Klooz Septic Service, that he serviced the tank every two years, and that a
man told Ms. Perkins that Mr. Klooz was scheduled to pump the tank on November 11, 2003,
and that Mr. Klooz pumped the tank every two years. As Mr. Klooz averred in his affidavit
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submitted with his Civ.R. 60(B) motion, “I did in fact pump the tank every two years, and was
scheduled to and did pump the tank on November 11, 2003. * * * I still do not understand [how
that allegation could make me responsible for a judgment in excess of $100,000] to this day.”
{¶13} Mr. Klooz’s confusion is understandable given that Ms. Perkins’ complaint is
devoid of a claim against him. For example, she alleged a breach of contract by the defendants
but never alleged that she had a contract with Mr. Klooz. She also alleged that the defendants
made fraudulent statements and representations to her but never alleged that Mr. Klooz made any
statements or representations to her. She did not even allege he failed to clean the septic tank as
was represented by Mr. Guthrie. Accordingly, Mr. Klooz did not admit to any liability when he
failed to respond to the complaint. Mr. Klooz has a meritorious defense against the judgment
and is entitled to relief under Civ.R. 60(B)(5). Thus, he has satisfied all the prongs of the GTE
Automatic test.
{¶14} Given that Ms. Perkins’ complaint did not allege a claim against Mr. Klooz, there
are substantial grounds for granting his Civ.R. 60(B) motion, and it was unreasonable for the trial
court to deny it. Mr. Klooz’s third assignment of error is sustained.
ASSIGNMENT OF ERROR I
“THE TRIAL COURT ABUSED ITS DISRECTION IN ITS DENIAL OF THE
DEFENDANT’S MOTION FOR RELIEF FROM JUDGMENT BROUGHT
PURSUANT TO OHIO RULE OF CIVIL PROCEDURE 60(B)(1)
REFERENCING A DEFAULT JUDGMENT ENTERED BY THE TRIAL
COURT AS THE APPELLANT ASSERTED NUMEROUS AND
MERITORIOUS DEFENSES JUSTIFYING RELIEF.”
ASSIGNMENT OF ERROR II
“THE TRIAL COURT ABUSED ITS DISCRETION IN ITS DENIAL OF THE
DEFENDANT’S MOTION FOR RELIEF FROM JUDGMENT BROUGHT
PURSUANT TO OHIO RULE OF CIVIL PROCEDURE 60(B)(3)
REFERENCING A DEFAULT JUDGMENT ENTERED BY THE TRIAL
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COURT AS THE APPELLANT ASSERTED NUMEROUS AND
MERITORIOUS DEFENSES JUSTIFYING SUCH RELIEF.”
ASSIGNMENT OF ERROR IV
“THE TRIAL COURT ABUSED ITS DISCRETION IN ITS DENIAL OF THE
DEFENDANT’S MOTION FOR RELIEF FROM JUDGMENT BROUGHT
PURSUANT TO OHIO RULE OF CIVIL PROCEDURE 60(B)(1) THROUGH
(B)(5) WITHOUT A HEARING AND WITHOUT THE ABILITY TO
PRESENT TESTIMONY IN SUPPORT OF THE ERRORS ALLEGEDLY
COMMITTED.”
{¶15} Mr. Klooz’s remaining assignments of error are rendered moot by our resolution
of his third assignment of error. Thus, we do not address them. See App.R. 12(A)(1)(c).
III.
{¶16} Mr. Klooz’s third assignment of error is sustained. His first, second, and fourth
assigned errors are moot. See App.R. 12(A)(1)(c). The judgment of the Medina County Court
of Common Pleas is reversed, and the matter is remanded for further proceedings consistent with
this opinion.
Judgment reversed,
and cause remanded.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Medina, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(E). The Clerk of the Court of Appeals is
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instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellee.
EVE V. BELFANCE
FOR THE COURT
MOORE, J.
CONCURS
DICKINSON, J.
CONCURS, SAYING:
{¶17} I concur in the majority's judgment and most of its opinion. While I acknowledge
that the Ohio Supreme Court has written that an abuse of discretion standard applies to the
review of a ruling on a motion for relief from judgment, in practice, both the Supreme Court and
this Court have applied a de novo standard: “In order for a party to prevail on a motion for relief
from judgment under Civ.R. 60(B), the movant must demonstrate the following . . . . These
requirements are independent and in the conjunctive; thus the test is not fulfilled if any one of the
requirements is not met.” Strack v. Pelton, 70 Ohio St. 3d 172, 174 (1994); see Buckingham,
Doolittle & Burroughs LLP v. Healthcare Imaging Solutions LLC, 9th Dist. No. 24699, 2010–
Ohio–418, at ¶10. If a moving party satisfies the three-prong test, a trial court does not have
discretion to deny relief. If a moving party does not meet the three-prong test, a trial court does
not have discretion to grant relief. This case is yet another example of that. Although the
majority has recited that it is applying an abuse of discretion standard, it has, in fact, given no
deference to the trial court’s decision. Mr. Klooz satisfied the three-prong test for relief under
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Rule 60(B), and, therefore, the trial court was required to grant his motion. It did not abuse its
discretion by failing to do so. It erred by failing to do so, and its decision is correctly reversed.
APPEARANCES:
RICHARD J. MARCO, JR., Attorney at Law, for Appellant.
THOMAS C. LOEPP, Attorney at Law, for Appellee.