U.S. Bank Natl. Assn. v. Birovsek , 2019 Ohio 838 ( 2019 )

[Cite as U.S. Bank Natl. Assn. v. Birovsek, 2019-Ohio-838.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
LAKE COUNTY, OHIO
U.S. BANK NATIONAL ASSOCIATION, : OPINION
NOT IN ITS INDIVIDUAL CAPACITY BUT
SOLELY AS TRUSTEE FOR THE RMAC :
TRUST, SERIES 2016-CT, CASE NO. 2018-L-074
:
Plaintiff-Appellee,
:
- vs -
:
MICHAEL J. BIROVSEK a.k.a.
MICHAEL BIROVSEK, et al., :
Defendant-Appellant. :
Civil Appeal from the Lake County Court of Common Pleas, Case No. 2016 CF
000248.
Judgment: Affirmed.
Phillip Barragate, Christopher George Phillips, and Ashlyn M. Heider, Shaprio, Van
Ess, Phillips & Barragate, 4805 Montgomery Road, Suite 320, Norwood, OH 45212
(For Plaintiff-Appellee).
Grace M. Doberdruk, Law Office of Grace M. Doberdruk, 3401 Enterprise Parkway,
Suite 340, Beachwood, OH 44122 (For Defendant-Appellant).
MATT LYNCH, J.
{¶1} Defendant-appellant, Michael J. Birovsek, appeals the following decisions
of the Lake County Court of Common Pleas: the May 8, 2018 Final Judgment Entry
granting default judgment in favor of plaintiff-appellee, U.S. Bank National Association;
the April 26, 2018 Order Denying his Motion for Leave to File Answer; and the March
23, 2018 Order Denying his Motion to Dismiss. For the following reasons, we affirm the
decision of the court below.
{¶2} On February 12, 2016, Nationstar Mortgage LLC filed a Complaint for
Money Judgment, Foreclosure and Relief in the Lake County Court of Common Pleas
against Birovsek and others not parties to this appeal.1
{¶3} On February 18, 2016, Birovsek was personally served with a copy of the
Summons and Complaint. The Summons advised Birovsek that, “[w]ithin 28 days after
service of this Summons upon you,” he was required to “serve a copy of an Answer to
the Complaint on the Plaintiff’s Attorney or on the Plaintiff,” and, “[w]ithin 3 days after
you serve the Plaintiff or the Plaintiff’s Attorney, file an Answer * * * with the Lake
County Clerk of Court.”
{¶4} On July 1, 2016, the trial court issued an Order Staying Litigation and
Referring Case to Mediation. The Order advised Birovsek that, during the mediation
process, “responsive pleadings may be filed.”
{¶5} On July 10, 2017, the trial court issued an Order Returning Case to the
Active Docket.
{¶6} On November 21, 2017, U.S. Bank was “substituted for Nationstar
Mortgage, LLC as Plaintiff.”
{¶7} On January 30, 2018, the trial court issued an Order and Notice to Plaintiff
to Take Affirmative Action. U.S. Bank was ordered “to take affirmative action within 21
days of the date of this order,” and was advised that, pursuant to Civil Rule 41(B)(1),
1. The other defendants were Alice M. Birovsek, the State of Ohio Department of Taxation, the City of
Eastlake Tax Department, and the Lake County Treasurer.
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“failure to comply with this order within 21 days will result in the dismissal of this action
without prejudice.”
{¶8} On March 5, 2018, U.S. Bank filed a Motion for Default Judgment.
{¶9} On March 15, 2018, Birovsek filed a Motion to Dismiss for Failure to
Prosecute, asking the trial court to enforce its January 30, 2018 Order.
{¶10} On March 19, 2018, Birovsek filed a Motion for Leave to File Answer
Instanter.
{¶11} On March 23, 2018, the trial court issued an Order Denying Birovsek’s
Motion to Dismiss.
{¶12} On April 26, 2018, the trial court issued an Order Denying Birovsek’s
Motion for Leave to File Answer.
{¶13} On May 8, 2018, the trial court issued a Final Judgment Entry, granting
U.S. Bank’s Motion for Default Judgment and entering judgment against Birovsek.
{¶14} On June 7, 2018, Birovsek filed a Notice of Appeal. On appeal, Birovsek
raises the following assignments of error:
{¶15} “[1.] The trial court abused its discretion by denying appellant Michael
Birovsek’s Motion to Dismiss for Failure to Prosecute.”
{¶16} “[2.] The trial court abused its discretion by granting a default judgment of
foreclosure.”
{¶17} In the first assignment of error, Birovsek contends the trial court erred by
denying his Motion to Dismiss.
{¶18} Civil Rule 41(B)(1) provides: “Where the plaintiff fails to prosecute, or
comply with these rules or any court order, the court upon motion of a defendant or on
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its own motion may, after notice to the plaintiff’s counsel, dismiss an action or claim.”
Typically, dismissal is reserved for those cases in which “the conduct of a party is so
negligent, irresponsible, contumacious or dilatory as to provide substantial grounds for
dismissal with prejudice for a failure to prosecute or obey a court order.” (Citation
omitted.) Sazima v. Chalko, 86 Ohio St. 3d 151, 158, 712 N.E.2d 729 (1999).
{¶19} “The power to dismiss for lack of prosecution is within the sound discretion
of the trial court, and appellate review is confined solely to whether the trial court
abused that discretion,” i.e., whether there existed an “unreasonable, arbitrary or
unconscionable attitude on the part of the court granting such motion.” (Citation
omitted.) Pembaur v. Leis, 1 Ohio St. 3d 89, 91, 437 N.E.2d 1199 (1982).
{¶20} We find no abuse of discretion. U.S. Bank’s Motion for Default Judgment
was filed only thirteen days after the twenty-one-day limit set by the trial court in its
January 30 Order. It was certainly within the court’s discretion to conclude that this
relatively minor delay did not constitute conduct so negligent, irresponsible,
contumacious or dilatory as to justify substantial grounds for dismissal. Waterfall
Victoria Master Fund Ltd. v. Yeager, 11th Dist. Lake No. 2011-L-025, 2012-Ohio-124, ¶
8 (rejecting the argument “that the trial court erred by failing to follow its own order
[threatening dismissal]” inasmuch as “[i]t is equally in the court’s discretion to not
dismiss a case for failure to prosecute when it is satisfied by a party’s subsequent action
with regard to the case”), rev’d on other grounds Fed. Home Loan Mgte. Corp. v. Rufo,
2012-Ohio-5930, 983 N.E.2d 406 (11th Dist.).
{¶21} Additionally, as noted by U.S. Bank, an order giving notice of potential
dismissal is an interlocutory order which the trial court is not bound to enforce inasmuch
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as the court may vacate such order prior to final judgment. Huntington Natl. Bank v.
Haehn, 10th Dist. Franklin No. 17AP-342, 2018-Ohio-4837, ¶ 24 (judgment entry
warning of dismissal was an interlocutory order subject to reconsideration and revision
“at any time before the entry of final judgment”).
{¶22} The first assignment of error is without merit.
{¶23} In the second assignment of error, Birovsek contends the trial court erred
by granting U.S. Bank’s Motion for Default Judgment. The propriety of awarding U.S.
Bank default judgment necessarily involves the consideration of the court’s denial of
Birovsek’s Motion for Leave to File Answer Instanter.
{¶24} Default judgment may be awarded “[w]hen a party against whom a
judgment for affirmative relief is sought has failed to plead or otherwise defend as
provided by these [civil] rules * * *.” Civ.R. 55(A); Davis v. Immediate Med. Servs., Inc.,
80 Ohio St. 3d 10, 14, 684 N.E.2d 292 (1997); Bank of America, N.A. v. Smith, 1st Dist.
Hamilton No. C-170654, 2018-Ohio-3638, ¶ 19 (“Ohio appellate courts have held that
‘the words “otherwise defend” refer to attacks on the service, or motions to dismiss, or
for better particulars, and the like, which may prevent default without presently pleading
to the merits’”) (citation omitted).
{¶25} “When by these rules * * * an act is required or allowed to be done at or
within a specified time, the court * * * may * * * upon motion made after the expiration of
the specified period permit the act to be done where the failure to act was the result of
excusable neglect.” Civ.R. 6(B)(2). “A sufficient showing of excusable neglect is a
necessary prelude to the granting of a motion to file an answer made after the period of
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time provided in Civ.R. 12(A)(1)2 for filing such answer.” Jenkins v. Clark, 7 Ohio
App.3d 93, 95, 454 N.E.2d 541 (2d Dist.1982); State ex rel. Weiss v. Indus. Comm. of
Ohio, 65 Ohio St. 3d 470, 472, 605 N.E.2d 37 (1992) (“[w]hen a motion for leave to
answer is filed after the date the answer was due, Civ.R. 6(B)(2) permits an extension
upon a showing of excusable neglect”).
{¶26} “A trial court’s decision to either grant a default judgment in favor of the
moving party, or allow the defending party to file a late answer pursuant to Civ.R.
6(B)(2) upon a finding of excusable neglect, will not be reversed absent an abuse of
discretion.” Huffer v. Cicero, 107 Ohio App. 3d 65, 74, 667 N.E.2d 1031 (4th Dist.1995);
Fourtounis v. Verginis, 2017-Ohio-8577, 101 N.E.3d 101, ¶ 11 (8th Dist.) (“the discretion
granted under Civ.R. 6(B)(2) is not unlimited, and there must be a showing of excusable
neglect”); Miller v. Lint, 62 Ohio St. 2d 209, 214, 404 N.E.2d 752 (1980) (“[w]hile this
court is in general agreement with the universal practice of allowing trial courts broad
discretion in settling procedural matters, such discretion, as evidenced by Civ.R. 6(B), is
not unlimited, and * * * some showing of ‘excusable neglect’ was a necessary prelude to
the filing of the answer”).
{¶27} In his Motion for Leave to File Answer Instanter, Birovsek claimed “that he
did not file an answer because he has been trying to obtain a loan modification and was
communicating with the mortgage servicer.” The trial court rejected Birovsek’s claim:
Here, there is absolutely no doubt that the defendant was
well aware of the pending litigation. He was served by both
personal service and certified mail. He also participated in
mediation for nearly a year. During that time, nothing prevented
him from answering the complaint. On the contrary, the court’s
order staying litigation specifically allowed for him to file responsive
2. Civil Rule 12(A)(1): “The defendant shall serve his answer within twenty-eight days after service of the
summons and complaint upon him.”
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pleadings during the period of inactivity. It is fair to presume that
the defendant knew that mediation failed. * * * Even if that was
somehow unclear to him, however, he was served with a copy of
the order reactivating the case. After that, the defendant received a
copy of the plaintiff’s motion to substitute party plaintiff. Based on
this, the defendant cannot now credibly claim that he was unaware
of the case or that he did not know it was proceeding against him. *
**
However, the court further finds that the fact that the case
was removed from mediation in 2017 belies the reasons for not
filing an answer alleged by the defendant in his motion. It is true
that between July 1, 2016, and July 7, 2017, he was
communicating with the mortgage servicer, and likely attempting to
obtain a loan modification. But the mediator’s report specifically
stated that a mutually acceptable resolution could not be reached.
From that point forward, there is no evidence on the record
supporting the defendant’s allegation that communications were
ongoing or that he was trying to modify his loan. Therefore, the
court finds the statements in the defendant’s motion to be
disingenuous.
{¶28} This court approves the lower court’s reasoning as to why Birovsek’s
failure to file a timely answer was not excusable. Compare 1st Fid. Loan Serv., L.L.C.
v. Bellina, 11th Dist. Lake No. 2014-L-092, 2015-Ohio-2199, ¶ 17 (“[a]ppellants never
established any excusable neglect for failing to file an answer, especially in view of the
fact that they participated in mediation and were fully aware of the pending litigation”);
Matthews v. Rader, 11th Dist. Lake No. 2003-L-092, 2005-Ohio-3271, ¶ 21 (where the
defendant “failed to demonstrate excusable neglect” his “answer was never properly
filed” and “therefore, * * * a nullity”).
{¶29} Birovsek counters that the trial court’s denial of leave was unreasonable in
light of the fact that the court allowed U.S. Bank to move for default contrary to its
January 30, 2018 Order requiring affirmative action within 21 days to avoid dismissal of
the action for failure to prosecute. Appellant’s brief at 8 (“Appellee filed a late motion for
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default judgment without official leave of court and * * * Birovsek gets a default judgment
against him for a case he could believe would be dismissed based on the court’s
January 30, 2018 order”).
{¶30} The trial court’s allowance of U.S. Bank’s Motion for Default contrary to
court order is only superficially inconsistent with the refusal to allow Birovsek leave to
file an answer out of rule. The January 30 Order was merely an interlocutory order of
the court and, as such, “subject to change or revision by the trial court any time prior to
the issuance of a final judgment.” (Citation omitted.) Whitehall v. Olander, 10th Dist.
Franklin No. 14AP-6, 2014-Ohio-4066, ¶ 21; Discover Bank v. Passmore, 11th Dist.
Lake No. 2015-L-098, 2016-Ohio-3121, ¶ 19 (interlocutory orders are “subject to
revision at any time”); Civ.R. 54(B).
{¶31} The provisions of Ohio’s Civil Rules are not subject to revision or selective
enforcement by the trial court. In Miller v. Lint, 62 Ohio St. 2d 209, 404 N.E.2d 752
(1980), the Ohio Supreme Court considered an appeal in which the plaintiffs moved for
default after the defendant failed to file any responsive pleading within rule. Following
the motion for default, the defendant filed an answer and the case proceeded to trial.
The Supreme Court reversed on the grounds that it was an abuse of discretion to allow
the answer in the absence of some showing of excusable neglect. Id. at 214 (“the
failure of the defendant to comply * * * with the procedures outlined in the Civil Rules
subjected her to the motion for default judgment, and the plaintiffs, having complied with
the Civil Rules, had a right to have their motion heard and decided before the cause
proceeded to trial on the merits”).
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{¶32} In so ruling, the Supreme Court emphasized adherence to the mandates
of the Civil Rules: “However hurried a court may be in its efforts to reach the merits of a
controversy, the integrity of the procedural rules is dependent upon consistent
enforcement because the only fair and reasonable alternative thereto is complete
abandonment.” Id. at 215.
{¶33} Accordingly, the import of the trial court’s disregard of its own order is not
comparable to its enforcement of the Civil Rules regardless of its effect on the outcome
of the case. Even if this were not so, the particular circumstances of U.S. Bank’s Motion
for Default and Birovsek’s Motion for Leave are distinguishable: the Motion for Default
was filed less than two weeks out of order in contrast to the Motion for Leave filed more
than two years out of Rule.
{¶34} The second assignment of error is without merit.
{¶35} For the foregoing reasons, the decisions of the Lake County Court of
Common Pleas, entering default judgment in favor of U.S. Bank, denying Birovsek leave
to answer, and refusing to dismiss for lack of prosecution, are affirmed. Costs to be
taxed against the appellant.
THOMAS R. WRIGHT, P.J.,
MARY JANE TRAPP, J.,
concur.
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