Lucas Cty. Treasurer v. Mt. Airy Invests. Ltd. ( 2019 )

[Cite as Lucas Cty. Treasurer v. Mt. Airy Invests. Ltd., 2019-Ohio-3932.]
IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
LUCAS COUNTY
Treasurer of Lucas County, Ohio Court of Appeals No. L-18-1254
Appellee Trial Court No. TF0201701622
v.
Mt. Airy Investments Ltd., et al. DECISION AND JUDGMENT
Appellant Decided: September 27, 2019
*****
Julia R. Bates, Lucas County Prosecuting Attorney, Evy M. Jarrett
and Suzanne Mandros, Assistant Prosecuting Attorneys, for appellee.
Howard B. Hershman, for appellant.
David J. Coyle and Emily M. Morrison, for intervenor Lucas County
Land Reutilization Corporation.
*****
MAYLE, P.J.
{¶ 1} Appellant, Mt. Airy Investments Ltd. (“Mt. Airy”), appeals the November 8,
2018 judgment of the Lucas County Court of Common Pleas that denied Mt. Airy’s
motion for relief from judgment. For the following reasons, we affirm.
I. Background and Facts
{¶ 2} In August 2017, appellee, Wade Kapszukiewicz, who was then the Lucas
County treasurer (“the treasurer”), filed a tax foreclosure case against property owned by
Mt. Airy. The case was assigned to the Lucas County board of revision. The record
reflects that the Lucas County clerk of courts sent a summons, by certified mail, to Dan
Robinson, Mt. Airy’s statutory agent, at 1012 St. James Court, Toledo. The certified mail
was returned unclaimed. On October 19, 2017, the clerk sent Robinson a summons at the
same address by ordinary mail. The ordinary mail was not returned to the clerk of courts.
{¶ 3} On December 15, 2017, the board of revision filed an adjudication of
foreclosure against the property, finding that Mt. Airy was in default for failing to
answer, Mt. Airy owed $35,157.88 in delinquent taxes, fees, and costs, and that the
property was “abandoned land and/or vacant land as defined in R.C. 323.65.” Over six
months later, on June 21, 2018, Mt. Airy filed a motion for relief from judgment, arguing
that the adjudication of foreclosure was void because Mt. Airy had never received service
of the summons and complaint, or, alternatively, that it was entitled to relief from
judgment under Civ.R. 60(B)(1) due to excusable neglect. Mt. Airy pointed out that the
court’s electronic docket showed that both the complaint in the Mt. Airy case and the
complaint from a different, unrelated case (with a separate case number) were docketed
in the Mt. Airy case. Based on that, Mt. Airy argued that it was impossible to know
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whether the correct complaint was sent to Robinson in the ordinary-mail summons, and,
if the incorrect complaint was sent, there was “an utter failure of service * * *.”
{¶ 4} In support of its motion, Mt. Airy submitted the affidavits of Adel Kamal,
the sole member of Mt. Airy; Tammy Aldabel, Kamal’s “attorney in fact” when the
complaint was filed; and Robinson.
{¶ 5} In his affidavit, Kamal averred that he was incarcerated at all relevant times
and had given Aldabel power of attorney to exercise his rights as the member of Mt.
Airy. According to Kamal, when Mt. Airy received a summons, the usual process was
that the summons was forwarded to him to determine what action should be taken. He
said that he did not receive a summons, a copy of the complaint in the underlying tax
foreclosure case, or any notice that Robinson had received a summons or copy of the
complaint. He claimed that, had he been aware of the tax foreclosure case, he would
have defended against the case by claiming that the property was not abandoned, or he
would have liquidated other assets to pay the delinquent taxes.
{¶ 6} Aldabel, in her affidavit, confirmed that she had power of attorney to act on
Kamal’s behalf at the time the tax foreclosure was filed. She also said that she did not
receive notice from Robinson about the proceedings and was unaware of the proceedings
until May 2018.
{¶ 7} In his affidavit, Robinson confirmed that he was the statutory agent for Mt.
Airy at the time the complaint was filed, that his address was 1012 St. James Court,
Toledo, and that if he received any summonses or “official notification[s]” addressed to
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Mt. Airy, he was directed to deliver such documents to Kamal or Aldabel. Although he
was contacted by an investigator for the Lucas County prosecutor’s office (which
represents the treasurer) to confirm his address, Robinson “did not receive any mail
pertaining to that contact * * *.” He also claimed that he “never had a summons to
deliver” to Kamal or Aldabel, and that he did not deliver a summons or official
communication relating to the tax foreclosure to anyone.
{¶ 8} On August 3, 2018, the treasurer filed a memorandum in opposition to Mt.
Airy’s motion, arguing that service was presumed and Mt. Airy was not entitled to relief
from judgment under Civ.R. 60(B) because it could not show excusable neglect or that it
had a meritorious defense. The treasurer contended that, under R.C. 323.72(A)(1), the
only statutory defenses to a tax foreclosure are (1) the taxes and costs in the complaint
have been paid in full, (2) the taxes and costs are invalid or inapplicable, (3) service of
process was insufficient, and (4) the subject parcel is not “abandoned land.” Of those, the
treasurer argued that Mt. Airy only alleged insufficiency of service and that Robinson’s
self-serving affidavit did not rebut the presumption of service that arises under Civ.R.
4.6(D) when certified mail is returned unclaimed and subsequent ordinary mail is not
returned. The treasurer also pointed out that the prosecutor, after the summons and
complaint were sent by ordinary mail and not returned, sent two notices of final hearing
by ordinary mail, one to Robinson at the St. James Court address and one to Mt. Airy at
its mailing address, that were not returned. Further, the treasurer characterized any
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neglect by Mt. Airy and Robinson as inexcusable because it amounted to ignoring the
summons and complaint.
{¶ 9} On November 8, 2018, the trial court denied Mt. Airy’s motion “for the
reasons articulated in [the treasurer’s] memorandum in opposition * * *.”
{¶ 10} Mt. Airy now appeals, raising two assignments of error:
I. The court below erred when it failed to grant Appellant’s motion
for relief from judgment without a hearing. The facts of the case regarding
service of the summons and complaint do not show that service was
complete so as to invoke the jurisdiction of the court below and, as a
consequence, the judgment rendered by the court below was void ab initio.
(Italics sic.)
II. The court below abused its discretion by failing to grant
Appellant’s Motion for Relief from Judgment pursuant to Civ. R. 60(B)
without a hearing. Appellant demonstrated excusable neglect and a
meritorious defense in the form of the exercise of its right to redeem, and
demonstrated other cause under Civ. R. 60(B)(5) with regard to the issue of
service of the summons and complaint.
II. Law and Analysis
A. The foreclosure adjudication was not void.
{¶ 11} In its first assignment of error, Mt. Airy argues that the trial court should
have granted its motion for relief based on failure of service. It contends that, due to an
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unrelated complaint appearing on the trial court’s online docket for the underlying case,
there is no way to know which complaint was sent to Robinson, and, if it was the
complaint from the unrelated case, it would not have put Mt. Airy on notice that a
complaint was pending against it. In response, the treasurer and intervening appellee, the
Lucas County Land Reutilization Corporation (“land bank”),1 argue that Mt. Airy failed
to rebut the presumption that service was proper, so the adjudication of foreclosure is not
void.
{¶ 12} It is axiomatic that a court must have jurisdiction over the parties and the
subject matter of a case to issue a valid judgment. Mantho v. Bd. of Liquor Control, 162
Ohio St. 37, 40, 120 N.E.2d 730 (1954). One of the ways a court obtains personal
jurisdiction over a party is by proper service of process. Maryhew v. Yova, 11 Ohio St.3d
154, 156, 464 N.E.2d 538 (1984). When service is not properly made under Civ.R. 4 to
4.6, the trial court lacks jurisdiction over the defendant who was not properly served;
consequently, any judgment issued against that defendant is void. Cavalry Invest., LLC
v. Clevenger, 6th Dist. Lucas No. L-05-1103, 2005-Ohio-7003, ¶ 9. And because a
judgment issued without jurisdiction is void, the party seeking to vacate the judgment
need not comply with the requirements of Civ.R. 60(B). Id.; see also State v. Apanovitch,
155 Ohio St.3d 358, 2018-Ohio-4744, 121 N.E.3d 351, ¶ 42, quoting Van DeRyt v. Van
DeRyt, 6 Ohio St.2d 31, 36, 215 N.E.2d 698 (1966) (recognizing that “‘[a] court has
1
The land bank took title to the property at issue following the adjudication of
foreclosure. We granted the land bank’s motion to intervene on March 25, 2019.
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inherent power to vacate a void judgment because such an order simply recognizes the
fact that the judgment was always a nullity.’”).
{¶ 13} Service of process must be made in a manner reasonably calculated to
apprise interested parties of the action and to afford them an opportunity to respond.
Akron-Canton Regional Airport Auth. v. Swinehart, 62 Ohio St.2d 403, 406, 406 N.E.2d
811 (1980). When the defendant is a limited liability company, service is properly made
on the company’s appointed statutory agent. Civ.R. 4.2(G); R.C. 1705.06(H)(1)(a); see
also R.C. 1705.06(A) (a limited liability company is required to appoint “an agent for
service of process on the company.”). The plaintiff in a case bears the burden of
achieving proper service on a defendant. Clevenger at ¶ 10, citing Cincinnati Ins. Co. v.
Emge, 124 Ohio App.3d 61, 63, 705 N.E.2d 408 (1st Dist.1997).
{¶ 14} One of the permissible methods of service is service by the clerk of courts
using certified U.S. mail with a return receipt requested. Civ.R. 4.1(A)(1)(a). If the
certified mail is returned “unclaimed,” the plaintiff may request that the clerk serve the
defendant by ordinary mail. Civ.R. 4.6(D). Service by ordinary mail is 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.”
Id.{¶ 15} If the plaintiff follows the Civil Rules governing service of process, courts
presume that service is proper unless the defendant rebuts this presumption with
sufficient evidence of nonservice. Clevenger at ¶ 10. Before finding that an underlying
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judgment is void for lack of service, the trial court must determine whether the defendant
presented “sufficient evidence of nonservice” to rebut the presumption of proper service.
United Home Fed. v. Rhonehouse, 76 Ohio App.3d 115, 125, 601 N.E.2d 138 (6th
Dist.1991). The presumption of proper service can be rebutted by “demonstrating a
procedural flaw in the service: use of the wrong address, receipt by someone who is not a
proper person, or untimely mailing or receipt.” Gaston v. Medina Cty. Bd. of Revision,
133 Ohio St.3d 18, 2012-Ohio-3872, 975 N.E.2d 941, ¶ 14 (discussing a similar mail-
service rule applied to service of decisions from administrative agencies).
{¶ 16} The evidence before the trial court showed that, after certified mail to
Robinson—Mt. Airy’s statutory agent—was returned as unclaimed, the clerk of courts
issued service to Robinson, as Mt. Airy’s statutory agent, by ordinary mail. The mail was
not returned as undeliverable. Thus, a presumption of proper service arose.
{¶ 17} In an effort to rebut this presumption, Robinson submitted an affidavit
stating that he “never had a summons to deliver” to Kamal or Aldabel. Mt. Airy also
argues that “it is apparent from the record that an envelope containing a summons and a
copy of a complaint was sent by ordinary mail to [Mt. Airy’s] statutory agent. However,
there is no way of knowing which complaint was actually sent.” (Emphasis sic.)
{¶ 18} We find that Mt. Airy fails to rebut the presumption of proper service.
Although the presence of an unrelated complaint on the case docket is arguably an
irregularity in the proceedings, it is not a “procedural flaw in the service” (i.e., use of the
wrong address, an improper person receiving the summons, or delayed mailing or receipt
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of the summons) that rebuts a presumption of proper service of process. Gaston at ¶ 14.
Similarly, Robinson’s statement that he “never had” a summons does not allege a
“procedural flaw” in service or otherwise rebut the presumption that service was proper.
Moreover, the presumption that the ordinary mail (containing the correct complaint)
reached its intended destination is bolstered by evidence that (1) the prosecutor’s office
sent a final hearing notice to Robinson, as statutory agent, by ordinary mail at the address
that he confirmed was his and, like the complaint sent by the clerk, the hearing notice was
not returned by the postal service; (2) the certified mail envelope that was returned
unclaimed by Robinson contained the correct complaint; and (3) Mt. Airy’s codefendant
(to which the clerk also sent service by ordinary mail) received the correct complaint and
filed an answer.
{¶ 19} We therefore find that Mt. Airy does not rebut the presumption of proper
service. The adjudication of foreclosure is not void, and the trial court did not err by
denying Mt. Airy’s motion to vacate. Mt. Airy’s first assignment of error is not well-
taken.
B. Mt. Airy is not entitled to relief under Civ.R. 60(B).
{¶ 20} In its second assignment of error, Mt. Airy argues that the trial court abused
its discretion by denying Mt. Airy’s motion for relief from judgment because it
sufficiently alleged facts that would warrant relief from judgment (thus necessitating a
hearing on the motion). The treasurer and the land bank each respond that Mt. Airy
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failed to demonstrate that it has a meritorious defense to the foreclosure action or that it is
entitled to relief under Civ.R. 60(B)(1)-(5).
{¶ 21} We review a trial court’s decision on a motion for relief from judgment for
an abuse of discretion. Griffey v. Rajan, 33 Ohio St.3d 75, 77, 514 N.E.2d 1122(1987). Abuse of discretion means that the trial court’s decision was unreasonable,
arbitrary, or unconscionable. State ex rel. Askew v. Goldhart, 75 Ohio St.3d 608, 610,
665 N.E.2d 200 (1996).
{¶ 22} As pertinent here, under Civ.R. 60(B), a party may be relieved from a final
judgment because of “(1) mistake, inadvertence, surprise or excusable neglect; * * * or
(5) any other reason justifying relief from the judgment.” A motion filed under Civ.R.
60(B) “shall be made within a reasonable time * * *” and, if the basis of the motion is
Civ.R. 60(B)(1), the motion must be made “not more than one year after the judgment,
order or proceeding was entered or taken.” Id.{¶ 23} To prevail on a motion for relief from judgment, the moving party 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 * * *.” GTE
Automatic Elec., Inc. v. Arc Industries, Inc., 47 Ohio St.2d 146, 351 N.E.2d 113 (1976),
paragraph two of the syllabus. “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, 637 N.E.2d 914 (1994).
10.
{¶ 24} A party seeking relief under Civ.R. 60(B) is required to allege “operative facts”
that support the claim, but “is not required to support its motion with evidentiary materials
* * *.” Kay v. Marc Glassman, Inc., 76 Ohio St.3d 18, 20, 665 N.E.2d 1102 (1996); Coulson v.
Coulson, 5 Ohio St.3d 12, 16, 448 N.E.2d 809 (1983). If the trial court determines that the
movant failed to allege operative facts that would warrant relief under Civ.R. 60(B), it may deny
the motion without a hearing. State ex rel. Richard v. Seidner, 76 Ohio St.3d 149, 151, 666
N.E.2d 1134 (1996).
{¶ 25} In the trial court, Mt. Airy moved for relief based on the excusable neglect
provision of Civ.R. 60(B)(1) and the catch-all provision of Civ.R. 60(B)(5). A motion
for relief from judgment based on insufficient service of process (i.e., the trial court’s
lack of personal jurisdiction over the defendant) is properly considered as a common-law
motion to vacate a void judgment, not as a Civ.R. 60(B)(5) motion for relief based on
“any other reason justifying relief from the judgment.” Romp v. Jean-Pierre, 6th Dist.
Lucas No. L-15-1123, 2016-Ohio-5072, ¶ 14. And we have already addressed the
propriety of service in this case. Thus, we find that Mt. Airy’s arguments under Civ.R.
60(B)(5) are without merit.
{¶ 26} Excusable neglect under Civ.R. 60(B)(1) is an “elusive concept” that the
Supreme Court of Ohio has defined in the negative. Kay at 20. Neglect is inexcusable if
it can be deemed a “‘complete disregard for the judicial system.’” Id., quoting GTE
Automatic Elec. at 153. Neglect is also inexcusable when it is a “‘consequence of the
party’s own carelessness, inattention, or willful disregard of the process of the court
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* * *,’” as opposed to a “‘consequence of some unexpected or unavoidable hindrance or
accident.’” Mason v. Mason, 5th Dist. Perry No. 10-CA-18, 2011-Ohio-4775, ¶ 28,
quoting Emery v. Smith, 5th Dist. Stark Nos. 2005CA00051 and 2005CA00098, 2005-
Ohio-5526, ¶ 16.
{¶ 27} Here, Mt. Airy did not allege operative facts that, if believed, showed that
its failure to respond to the tax foreclosure action was excusable. Mt. Airy bases its
excusable neglect argument on Robinson’s failure to transmit the summons and
complaint to either Kamal or Aldabel. But, as this court has previously held, an agent’s
failure to appropriately forward a complaint does not automatically constitute excusable
neglect. See T.S. Expediting Servs., Inc. v. Mexican Industries, Inc., 6th Dist. Wood No.
WD-01-060, 2002-Ohio-2268, ¶ 18. Moreover, in the cases Mt. Airy cites there was
some evidence of the agent mishandling a complaint or filing. See, e.g., Kay, 76 Ohio
St.3d 18, 665 N.E.2d 1102 (excusable neglect found where attorney’s secretary
mistakenly put an answer in the case file instead of filing it with the clerk of courts);
Perry v. Gen. Motors Corp., 113 Ohio App.3d 318, 680 N.E.2d 1069 (10th Dist.1996)
(excusable neglect found when employee who received summons and complaint did not
open envelope and forwarded it to payroll department instead of corporate counsel);
Sycamore Messenger, Inc. v. Cattle Barons, Inc., 31 Ohio App.3d 196, 509 N.E.2d 977(1st Dist.1986) (excusable neglect found when defendant’s bookkeeper failed to forward
the complaint to the appropriate person and bookkeeper was subsequently fired).
12.
{¶ 28} Unlike the cases Mt. Airy relies on, in this case, the agent—Robinson—
does not aver that he somehow neglected his duties by mishandling the summons and
complaint. Rather, he claims that he “never had” the summons and complaint. And even
if Robinson had claimed to mishandle the summons and complaint, Mt. Airy would not
be entitled to relief under Civ.R. 60(B)(1) because it has not alleged any additional facts
to demonstrate that any neglect by Robinson was excusable.
{¶ 29} Because Mt. Airy has not shown that it was entitled to relief under Civ.R.
60(B)(1)-(5), it does not meet the requirements of the GTE Automatic Elec. test and is not
entitled to relief from judgment. Strack, 70 Ohio St.3d at 174, 637 N.E.2d 914 (“[T]he
test [under GTE Automatic Elec.] is not fulfilled if any one of the requirements is not
met.”). Thus, we find that the trial court did not abuse its discretion when it denied Mt.
Airy’s motion for relief without holding a hearing. Mt. Airy’s second assignment of error
is not well-taken.
III. Conclusion
{¶ 30} Based on the foregoing, the November 8, 2018 judgment of the Lucas
County Court of Common Pleas is affirmed. Mt. Airy is ordered to pay the costs of this
appeal pursuant to App.R. 24.
Judgment affirmed.
13.
Treasurer of Lucas Cty.,
Ohio v. Mt. Airy Invests. Ltd.
C.A. No. L-18-1254
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.
Arlene Singer, J. _______________________________
JUDGE
Christine E. Mayle, P.J.
_______________________________
Gene A. Zmuda, J. JUDGE
CONCUR.
_______________________________
JUDGE
This decision is subject to further editing by the Supreme Court of
Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
version are advised to visit the Ohio Supreme Court’s web site at:
http://www.supremecourt.ohio.gov/ROD/docs/.
14.