Midland Funding, L.L.C. v. Cherrier , 2020 Ohio 3280 ( 2020 )

[Cite as Midland Funding, L.L.C. v. Cherrier, 2020-Ohio-3280.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
MIDLAND FUNDING, L.L.C., :
Plaintiff-Appellee, :
No. 108595
v. :
NATHAN CHERRIER, :
Defendant-Appellant. :
JOURNAL ENTRY AND OPINION
JUDGMENT: REVERSED AND REMANDED
RELEASED AND JOURNALIZED: June 11, 2020
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-08-679103
Appearances:
Law Office of J. Michael Goldberg, L.L.C., and J. Michael
Goldberg, for appellant.
EILEEN T. GALLAGHER, A.J.:
Defendant-appellant, Nathan Cherrier (“Cherrier”), appeals the
denial of his motions to vacate a default judgment and to dismiss the complaint. He
claims three errors:
1. The trial court erred as a matter of law in denying defendant-
appellant’s motion to vacate the void default judgment.
2. The trial court abused its discretion by disregarding unrefuted sworn
testimony that defendant did not reside at the address where service of
process was attempted.
3. The trial court erred as a matter of law in denying defendant-
appellant’s motion to dismiss the complaint.
We find merit to the appeal, reverse the trial court’s judgment, and
remand the case to the trial court to vacate the default judgment.
I. Facts and Procedural History
Plaintiff-appellee, Midland Funding L.L.C. (“Midland”), filed a
complaint to recover a debt on December 22, 2008. The clerk of the Cuyahoga
County Common Pleas Court sent service of the complaint by certified mail to 3365
Tullamore Road, in Cleveland Heights, Ohio (the “Tullamore address”). The mailing
was returned to the clerk as “unclaimed.” The clerk subsequently sent service of the
complaint to the Tullamore address by ordinary mail on February 4, 2009. This
mailing was not returned to the clerk, and no answer to the complaint was filed.
Consequently, in May 2009, the court entered a default judgment against Cherrier
in the amount of $1,785.46, plus costs and statutory interest from the date of
judgment.
Nine and half years later, on October 8, 2018, Midland filed a
postjudgment motion to revive the default judgment, which had become dormant.
Once again, Midland filed instructions with the clerk of courts to serve the motion
and summons by certified mail to Cherrier at the Tullamore address. The mailing
was returned “unclaimed” on November 4, 2018. Per Midland’s request, the clerk
subsequently sent service of the motion and summons to the Tullamore address by
ordinary mail on December 27, 2018. On January 25, 2019, Cherrier filed a motion
to quash service of the motion and to dismiss the complaint, arguing the trial court
lacked personal jurisdiction to render a judgment against him in 2009 because he
was never properly served with the complaint.
The trial court held a hearing on Midland’s motion to revive a
dormant judgment and on Cherrier’s motions to quash service of summons and to
dismiss the complaint. Cherrier testified that he was not living at the Tullamore
address in December 2008, when the complaint was filed and service was
attempted. (Tr. 12-13.) Cherrier lived temporarily with his mother at that address
from sometime in 2007 until July 2008, when he moved to Willoughby, Ohio. (Tr.
13.) Cherrier explained that he moved out of his mother’s house because he had a
“contentious” relationship with her and they rarely spoke to each other. (Tr. 14.)
Cherrier had his mail forwarded from the Tullamore address in July 2008, but did
not remember how long the mail was forwarded to his new address. Cherrier
testified that he had no knowledge that he had been sued until his mother contacted
him when she received Midland’s motion to revive a dormant judgment in January
2019. (Tr. 15.)
Following the hearing, the court denied Midland’s motion to revive
the dormant judgment and denied Cherrier’s motion to quash the service of process
relating to Midland’s motion to revive a dormant judgment as moot. The court
converted Cherrier’s motion to dismiss the complaint into a motion for relief from
judgment and denied it. The court found that Cherrier was properly served with the
complaint by ordinary mail in January 2009, since the ordinary mail service was
sent to his last known address. The court’s judgment entry further held that
Midland has until May 14, 2024, to file another motion to revive the dormant
judgment. This appeal followed.
II. Law and Analysis
A. Motion to Vacate
In the first assignment of error, Cherrier argues the trial court
erroneously failed to vacate the default judgment. He contends the default
judgment is void because Midland failed to perfect service on him and, therefore,
the trial court lacked personal jurisdiction to render a judgment against him.
Cherrier also contends the court erred in converting his motion to vacate the default
judgment into a motion for relief from judgment under Civ.R. 60(B) because the
default judgment was void.
In the second assignment of error, Cherrier argues the trial court
abused its discretion by failing to consider the unrefuted sworn testimony that
(1) Cherrier did not reside at the Tullamore address where service was attempted in
December 2008 and February 2009, and (2) Cherrier did not receive notice of the
lawsuit until Midland attempted to revive the default judgment, almost ten years
after Midland attempted to serve him with the complaint and summons. We discuss
these assigned errors together because they are closely related.
A trial court cannot render judgment against a defendant over whom
it has no personal jurisdiction. “[T]o enter a valid judgment, a court must have
personal jurisdiction over the defendant.” Mayfran Intl., Inc. v. Eco-Modity, L.L.C.,
2019-Ohio-4350, 135 N.E.3d 792, ¶ 9 (8th Dist.), citing Maryhew v. Yova, 11 Ohio
St.3d 154, 156, 464 N.E.2d 538 (1984). A judgment rendered without personal
jurisdiction is void. GGNSC Lima, L.L.C. v. LMOP, L.L.C., 8th Dist. Cuyahoga No.
105910, 2018-Ohio-1298, ¶ 14, citing Patton v. Diemer, 35 Ohio St. 3d 68, 518 N.E.2d
941 (1988), paragraph three of the syllabus.
A court does not acquire personal jurisdiction over a defendant unless
and until the defendant is properly served with the complaint and summons or the
defendant makes an appearance in the case. State ex rel. Ballard v. O’Donnell, 50
Ohio St. 3d 182, 553 N.E.2d 650 (1990), syllabus. Since it is undisputed that Cherrier
never made an appearance in the case, and Midland never obtained service by
certified mail, the issue in this case is whether Cherrier was properly served by
ordinary mail.
Service of process, which is governed by Civ.R. 4.1 through 4.6, must
be made in a manner reasonably calculated to apprise the defendant of the action
and to afford him an opportunity to respond. Akron-Canton Regional Airport Auth.
v. Swinehart, 62 Ohio St. 2d 403, 406, 406 N.E.2d 811 (1980). As relevant here,
Civ.R. 4.6(D) provides that when service of the complaint is returned “unclaimed,”
the serving party may attempt to serve the defendant by ordinary mail. Under Civ.R.
4.6(D), 1 service by ordinary mail is deemed complete only 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.” Civ.R. 4.6(D).
The plaintiff bears the burden of obtaining proper service on a
defendant. Cincinnati Ins. Co. v. Emge, 124 Ohio App. 3d 61, 63, 705 N.E.2d 408
(1st Dist.1997). Where 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. Hook v. Collins, 8th Dist.
Cuyahoga No. 104825, 2017-Ohio-976, ¶ 14, citing Carter-Jones Lumber Co. v.
Meyers, 2d Dist. Clark No. 2005 CA 97, 2006-Ohio-5380, ¶ 11. “Where the
defendant files a motion to vacate judgment, and swears under oath that he or she
did not reside at the address to which process was sent, the presumption is rebutted,
and it is incumbent upon the plaintiff to produce evidence demonstrating that
defendant resided at the address in question.” Id., quoting Watts v. Brown, 8th
Dist. Cuyahoga No. 45638, 1983 Ohio App. LEXIS 15311, 14-15 (Aug. 4, 1983).
We review the trial court’s judgment regarding the validity of service
for an abuse of discretion. GGNSC Lima, L.L.C., 8th Dist. Cuyahoga No. 105910,
2018-Ohio-1298, at ¶ 15. A trial court abuses its discretion when, among other
things, it “applies the wrong legal standard, misapplies the correct legal standard, or
1 Civ.R. 4.6(D) governs service of process by regular mail after an attempt of
service by certified mail is returned “unclaimed.” Civ.R. 4.6(C) provides a slightly less
stringent rule after service by certified mail has been “refused.” Under Civ.R. 4.6(C),
service by ordinary mail is deemed “complete” simply when “the fact of mailing is entered
of record.”
relies on clearly erroneous findings of fact.” Thomas v. Cleveland, 176 Ohio App. 3d
401, 2008-Ohio-1720, 892 N.E.2d 454, ¶ 15 (8th Dist.), citing Berger v. Mayfield
Hts., 265 F.3d 399, 402 (6th Cir.2001).
Cherrier testified under oath at the hearing that he moved away from
the Tullamore address in July 2008, because his relationship with his mother was
“contentious.” (Tr. 13-14.) Since service was not attempted at that address until
December 2008, Cherrier moved away from the Tullamore address at least five
months before service was attempted. Cherrier testified that he never received the
complaint or summons and had no knowledge that he had been sued until January
2019, when his mother received the motion to revive a dormant judgment. (Tr. 14-
15.) Cherrier testified that his mother never contacted him to inform him that she
received mail in his name from the Cuyahoga County Clerk of Courts in December
2008 or early 2009.
Midland elicited no testimony and presented no evidence to refute
Cherrier’s testimony that he did not live at the Tullamore address when process was
attempted there. Moreover, the trial court never indicated that it found Cherrier’s
testimony incredible. Indeed, there is no evidence that the trial court considered
Cherrier’s testimony at all. The trial court’s judgment entry states, in relevant part:
Upon review of the docket[,] the certified mail receipt came back
unclaimed on 1/12/2009 from the Tullamore address. Pursuant to OH
Civ. Rule 4.6(D), ordinary mail was then sent to the Tullamore address
on 2/2/2009. Service was obtained by mailing it to the last known
address by United States mail and was complete upon mailing. OH Civ.
Rule 5(B)(2)(c). As such, upon review of the docket, the court finds that
defendant Nathan Cherrier was properly served the initial complaint in
this matter.
Thus, the trial court concluded there was valid service simply because Midland
mailed the complaint to the Tullamore address by regular mail and the Tullamore
address was his last known address. This is not the correct standard. As previously
stated, when a defendant testifies under oath that he did not reside at the address
where process was sent and that he never received service, the presumption of
service is rebutted, and the plaintiff must produce evidence demonstrating that the
defendant lived at the address in question. Hook, 8th Dist. Cuyahoga No. 104825,
2017-Ohio-976, ¶ 15. The plaintiff, Midland, offered no evidence to refute Cherrier’s
testimony. Therefore, the presumption of service was rebutted. In the absence of
proper service, the trial court lacked personal jurisdiction to render the default
judgment against Cherrier and the default judgment is void.
Trial courts have inherent authority to vacate a void judgment, and a
party asserting lack of jurisdiction due to lack of service does not need to meet the
requirements of Civ.R. 60(B). GGNSC Lima, L.L.C., 8th Dist. Cuyahoga No. 105910,
2018-Ohio-1298, at ¶ 15. See also Patton v. Diemer, 35 Ohio St. 3d 68, 518 N.E.2d
941 (1988), paragraph four of the syllabus (“The authority to vacate a void judgment
is an inherent power of the court and is not derivative of Civ.R. 60(B)[.]”) In other
words, “[a] default judgment rendered by a court without obtaining service over the
defendant is void, and the party is entitled to vacation of the judgment.” Id. at ¶ 15,
citing O’Donnell, 50 Ohio St. 3d 182, 553 N.E.2d 650. Therefore, the trial court erred
in converting Cherrier’s motion to vacate the default judgment into motion for relief
from judgment under Civ.R. 60(B) and abused its discretion in failing to vacate the
void default judgment.
The first and second assignments of error are sustained.
B. Dismissal
In the third assignment of error, Cherrier argues the trial court erred
in denying his motion to dismiss the complaint. He contends the complaint should
have been dismissed since the action was not “commenced” within one year of filing.
Civ.R. 3(A) states that “[a] civil action is commenced by filing a
complaint with the court, if service is obtained within one year from such filing upon
a named defendant[.]” Civ.R. 4(E) provides a time limit within which service must
be obtained in order to avoid dismissal of the complaint and states, in relevant part:
If a service of the summons and complaint is not made upon a
defendant within six months after the filing of the complaint and the
party on whose behalf such service was required cannot show good
cause why such service was not made within that period, the action
shall be dismissed as to that defendant without prejudice upon the
court’s own initiative with notice to such party or upon motion.
Cherrier provided undisputed evidence that Midland failed to
properly serve him within one year of filing the complaint and moved to dismiss the
complaint. Moreover, Cherrier argued in the trial court that the complaint should
be dismissed due to insufficiency of process, insufficiency of service of process, and
lack of personal jurisdiction pursuant to Civ.R. 12(B)(2) (lack of personal
jurisdiction), Civ.R. 12(B)(4) (insufficiency of process), and Civ.R. 12(B)(5)
(insufficiency of service of process).
Lack of personal jurisdiction, insufficiency of process, and
insufficiency of service of process are affirmative defenses that may be raised in a
motion to dismiss. See Civ.R. 12(B)(2), (4), and (5). Indeed, dismissal pursuant to
a motion filed under Civ.R. 12(B)(2), (4), and (5) is appropriate when a plaintiff fails
to perfect service within the one-year period set forth in Civ.R. 3(A). Lewis v. Moore,
10th Dist. Franklin No. 16AP-775, 2017-Ohio-4049, ¶ 11, citing Craig v. Reynolds,
10th Dist. Franklin No. 14AP-125, 2014-Ohio-3254; Sheets v. Sasfy, 10th Dist.
Franklin No. 98AP-539, 1999 Ohio App. LEXIS 202 (Jan. 26, 1999); Coke v. Mayo,
10th Dist. Franklin No. 98AP-550, 1999 Ohio App. LEXIS 346 (Feb. 4, 1999); In re
Moore, 14 Ohio App. 3d 264, 470 N.E.2d 916 (10th Dist.1984), syllabus.
However, Civ.R. 41(B)(4) provides that a dismissal for lack of
personal or subject matter jurisdiction “shall operate as a failure otherwise than on
the merits.” Ordinarily, a dismissal “otherwise than on the merits” is a dismissal
without prejudice and does not prevent a party from refiling the complaint, unless
the refiling of the complaint is barred for some other reason such as the expiration
of the statute of limitations. Natl. City Commercial Capital Corp. v. AAAA at Your
Serv., Inc., 114 Ohio St. 3d 82, 2007-Ohio-2942, 868 N.E.2d 663, ¶ 8; Thomas v.
Freeman, 79 Ohio St. 3d 221, 225, 680 N.E.2d 997 (1997), Anderson v. Borg-
Warner Corp., 8th Dist. Cuyahoga Nos. 80551 and 80926, 2003-Ohio-1500, ¶ 27
(Asbestos claims were barred by statute of limitations where plaintiffs failed to
obtain service on the defendants within one year of filing their complaint.).
Therefore, the trial court should have dismissed the complaint without prejudice
pursuant to Civ.R. 12(B)(2), 12(B)(4), and 12(B)(5) and allowed Midland to
determine whether it was appropriate to refile the complaint.
Judgment reversed. We remand the case to the trial court to vacate
the default judgment and dismiss the complaint without prejudice.
It is ordered that appellant recover from appellee the costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to the common pleas court to carry
this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
EILEEN T. GALLAGHER, ADMINISTRATIVE JUDGE
SEAN C. GALLAGHER, J., and
MARY EILEEN KILBANE, J., CONCUR