State ex rel. Capital One Bank (USA) N.A. v. Karner

[Cite as State ex rel. Capital One Bank (USA) N.A. v. Karner, 2011-Ohio-6439.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 96739
STATE OF OHIO, EX REL.
CAPITAL ONE BANK (USA) N.A.
RELATOR
vs.
JUDGE CHERYL S. KARNER, ET AL.
RESPONDENT
JUDGMENT:
WRITS DISMISSED
Writ of Mandamus and of Prohibition
Motion No. 444684
Order No. 448718
RELEASED DATE: December 13, 2011
ATTORNEYS FOR RELATOR
Kimberly Y. Smith Rivera
James S. Wertheim
McGlinchey Stafford, PLLC
25550 Chagrin Blvd.
Suite 406
Cleveland, OH 44122
ATTORNEY FOR RESPONDENT
William D. Mason
Cuyahoga County Prosecutor
By: Charles E. Hannan, Jr.
Assistant County Prosecutor
8th Floor Justice Center
1200 Ontario Street
Cleveland, Ohio 44113
LARRY A. JONES, J.:
{¶ 1} On April 29, 2011, the relator, Capital One Bank (USA) N.A. (“Capital
One”) commenced this prohibition and mandamus action against the respondent, Judge
Cheryl Karner. Capital One is asking this court to prevent the judge from taking any
action against Capital One for not responding to a subpoena and an order to compel and
to have her vacate in its entirety her order granting the motion to compel in the underlying
case, Feinerer v. Feinerer, Cuyahoga County Common Pleas Court, Domestic Relations
Division Case No. DR-10-332088. Capital One argues that the respondent judge lacks
subject matter jurisdiction over it, because as a non-party, non-domiciliary, the bank is
beyond the respondent’s subpoena power and service of the subpoena was improper.
{¶ 2} Capital One also sought an alternative writ, which this court granted,
prohibiting the respondent from going forward with a hearing for sanctions and attorney’s
fees until this court resolved this writ action. The court also ordered a briefing schedule.
Thus, on May 20, 2011, the respondent moved to dismiss, and on June 10, 2011, Capital
One filed its brief in opposition. For the following reasons, this court grants the
respondent’s motion to dismiss.
{¶ 3} Capital One is a national bank, organized under the National Bank Act,
Section 1 et seq., Title 12, U.S. Code. It is located in Virginia, and does not have an
Ohio statutory agent.
{¶ 4} In July 2010, in the underlying divorce case, the wife’s attorney sought to
issue a subpoena on Capital One to obtain information and various records about the
husband, such as credit applications, credit reports, records of accounts, funds on deposit,
and amount of income. The lawyer sent a subpoena to Capital One via CSC Lawyers
Incorporation Service (hereinafter “CSC”) and another subpoena to Capital One Services,
Inc., also via CSC. CSC sent the lawyer a notice of rejection of service concerning the
Capital One subpoena because there was no entity with Capital One’s name on file with
the Ohio Secretary of State. Capital One Services, Inc. no longer existed, so CSC served
that subpoena upon its successor, Capital One Services, LLC, which is related to Capital
One, but is a different entity. Capital One Services, LLC was not in possession of the
requested records and information, so it forwarded a courtesy copy of the subpoena to
Capital One.
{¶ 5} On August 6, 2010, Capital One sent the attorney a letter stating that it was
“in receipt of the subpoena” directed to Capital One Services. (Exhibit F to the
complaint.) The letter stated that Capital One could not respond to the subpoena
because it was the wrong entity; the subpoena was not properly served; the state court
exceeded its jurisdiction in trying to serve a subpoena outside of its territory; the attorney
did not use the proper means (the Uniform Foreign Depositions Act or R.C. 2319.09) to
issue a subpoena in Virginia; and Capital One, under federal law, could only release the
requested personal information pursuant to a properly issued and served subpoena.
Capital One did not provide any of the requested records or information.
{¶ 6} On October 8, 2010, the wife’s attorney filed a motion to compel in the
underlying case in which he stated that he had served Capital One and Capital One
Services via CSC, their statutory agent; that CSC had sent a rejection of service; and
that Capital One acknowledged receipt of a subpoena and tried to explain why it could
not comply. The attorney asserted that Capital One was blatantly ignoring its
responsibilities and asked the court to issue an order compelling Capital One to release
the records and to pay the wife’s attorney fees.
{¶ 7} On October 13, 2010, the respondent judge granted the motion to compel
and ordered Capital One to respond to the subpoena by October 26, 2010. The
respondent passed the issue of sanctions and attorney’s fees to the final hearing.
{¶ 8} Capital One maintains that it was not served with this order and did not
learn of it until November 9, 2010. On November 17, 2010, Capital One made a limited
appearance to contest jurisdiction over it and to file a motion to vacate the October 13,
2010 order.
{¶ 9} Subsequently, the husband in the underlying action issued a release of his
personal information, and Capital One fully provided all of the requested records and
information. On April 1, 2011, the respondent judge issued a journal entry vacating the
October 13, 2010 order and noted that Capital One produced all the requested documents
and would continue to produce requested records if the parties provide the necessary
releases. The respondent further ruled that attorney’s fees and sanctions would be
decided at the final hearing. Capital One then commenced this writ action in prohibition
to prevent such a hearing and in mandamus to vacate the order concerning sanctions and
attorney’s fees.
{¶ 10} The principles governing prohibition are well established. Its requisites are
(1) the respondent against whom it is sought is about to exercise judicial power, (2) the
exercise of such power is unauthorized by law, and (3) there is no adequate remedy at
law. State ex rel. Largent v. Fisher (1989), 43 Ohio St. 3d 160, 540 N.E.2d 239.
Prohibition will not lie unless it clearly appears that the court has no jurisdiction of the
cause which it is attempting to adjudicate or the court is about to exceed its jurisdiction.
State ex rel. Ellis v. McCabe (1941), 138 Ohio St. 417, 35 N.E.2d 571, paragraph three of
the syllabus. “The writ will not issue to prevent an erroneous judgment, or to serve the
purpose of appeal, or to correct mistakes of the lower court in deciding questions within
its jurisdiction.” State ex rel. Sparto v. Juvenile Court of Darke County (1950), 153
Ohio St. 64, 65, 90 N.E.2d 598. Furthermore, it should be used with great caution and
not issue in a doubtful case. State ex rel. Merion v. Tuscarawas Cty. Court of Common
Pleas (1940), 137 Ohio St. 273, 28 N.E.2d 273, and Reiss v. Columbus Municipal Court
(App. 1956), 76 Ohio Law. Abs. 141, 145 N.E.2d 447.
{¶ 11} Nevertheless, when a court is patently and unambiguously without
jurisdiction to act whatsoever, the availability or adequacy of a remedy is immaterial to
the issuance of a writ of prohibition. State ex rel. Tilford v. Crush (1988), 39 Ohio St. 3d
174, 529 N.E.2d 1245 and State ex rel. Csank v. Jaffe (1995), 107 Ohio App. 3d 387, 668
N.E.2d 996. But absent such a patent and unambiguous lack of jurisdiction, a court
having general jurisdiction of the subject matter of an action has authority to determine its
own jurisdiction. A party challenging the court’s jurisdiction has an adequate remedy at
law via appeal from the court’s holding that it has jurisdiction. State ex rel. Rootstown
Local School Dist. Bd. of Edn. v. Portage County Court of Common Pleas (1997), 78
Ohio St. 3d 489, 678 N.E.2d 1365 and State ex rel. Bradford v. Trumbull Cty. Court, 64
Ohio St. 3d 502, 1992-Ohio-116, 597 N.E.2d 116. Moreover, the court has discretion in
issuing the writ of prohibition. State ex rel. Gilligan v. Hoddinott (1973), 36 Ohio St. 2d
127, 304 N.E.2d 382.
{¶ 12} Similarly, the requisites for mandamus are well established: (1) the relator
must have a clear legal right to the requested relief, (2) the respondent must have a clear
legal duty to perform the requested relief and (3) there must be no adequate remedy at
law. Additionally, although mandamus may be used to compel a court to exercise
judgment or to discharge a function, it may not control judicial discretion, even if that
discretion is grossly abused. State ex rel. Ney v. Niehaus (1987), 33 Ohio St. 3d 118, 515
N.E.2d 914. Furthermore, mandamus is not a substitute for appeal. State ex rel.
Keenan v. Calabrese (1994), 69 Ohio St. 3d 176, 631 N.E.2d 119; State ex rel. Daggett v.
Gessaman (1973), 34 Ohio St. 2d 55, 295 N.E.2d 659; and State ex rel. Pressley v. Indus.
Comm. of Ohio (1967), 11 Ohio St. 2d 141, 228 N.E.2d 631, paragraph three of the
syllabus. Thus, mandamus does not lie to correct errors and procedural irregularities in
the course of a case. State ex rel. Jerninghan v. Gaughan (Sept. 26, 1994), Cuyahoga
App. No. 67787. Moreover, mandamus is an extraordinary remedy which is to be
exercised with caution and only when the right is clear. It should not issue in doubtful
cases. State ex rel. Taylor v. Glasser (1977), 50 Ohio St. 2d 165, 364 N.E.2d 1; State ex
rel. Shafer v. Ohio Turnpike Commission (1953), 159 Ohio St. 581, 113 N.E.2d 14; State
ex rel. Connole v. Cleveland Board of Education (1993), 87 Ohio App. 3d 43, 621 N.E.2d
850; and State ex rel. Dayton-Oakwood Press v. Dissinger (1940), 32 Ohio Law. Abs.
308.
{¶ 13} If a court is without jurisdiction to render a judgment, mandamus will lie to
compel the court to vacate its judgment and findings. State ex rel. Ballard v. O’Donnell
(1990), 50 Ohio St. 3d 182, 553 N.E.2d 650. This is the principle on which Capital One
premises its claim for mandamus.
{¶ 14} Like prohibition, the court has discretion in issuing mandamus. In State ex
rel. Pressley v. Indus. Comm. of Ohio (1967), 11 Ohio St. 2d 141, 228 N.E.2d 631,
paragraph seven of the syllabus, the Supreme Court of Ohio ruled that “in considering the
allowance or denial of the writ of mandamus on the merits, [the court] will exercise
sound, legal and judicial discretion based upon all the facts and circumstances in the
individual case and the justice to be done.” The Pressley court elaborated that in
exercising that discretion the court should consider “the exigency which calls for the
exercise of such discretion, the nature and extent of the wrong or injury which would
follow a refusal of the writ, and other facts which have a bearing on the particular case.
*** Among the facts and circumstances which the court will consider are the applicant’s
rights, the interests of third persons, the importance or unimportance of the case, the
applicant’s conduct, the equity and justice of the relator’s case, public policy and the
public’s interest, whether the performance of the act by the respondent would give the
relator any effective relief, and whether such act would be impossible, illegal, or useless.”
Id. at 161-162, see, also, State ex rel. Bennett v. Lime (1978), 55 Ohio St. 2d 62, 378
N.E.2d 152; State ex rel. Dollison v. Reddy (1978), 55 Ohio St. 2d 59, 378 N.E.2d 150;
and State ex rel. Mettler v. Commissioners of Athens County (1941), 139 Ohio St. 86, 38
N.E.2d 393.
{¶ 15} Capital One’s first argument is that the respondent judge lacks jurisdiction
to assess sanctions and attorney’s fees for failure to comply with the subpoena because
the subpoena was not served on Capital One. It reasons that CSC rejected the actual
Capital One subpoena and that the Capital One Services, Inc. subpoena was for a
different entity. Therefore, Capital One was never served with the necessary subpoena,
and the trial court did not have jurisdiction to enforce it. Capital One cites to various
cases to support its position. In Amos Suburban Newspapers v. Platt (May 17, 1996),
Montgomery App. No. 15431, the court of appeals upheld the trial court’s decision not to
enforce some subpoenas: “Since the subpoenas were defective, * * * the referee would
have had no judicial power to enforce those subpoenas.” (Page 3 of the slip opinion).
In Carosella v. Conwell (2000), 138 Ohio App. 3d 688, 742 N.E.2d 188, discretionary
appeal not allowed (2000), 90 Ohio St. 3d 1484, 738 N.E.2d 1256, the trial court had
granted a motion for new trial in part because an entity had not responded to a subpoena.
On appeal, this court reversed and ruled that the subpoena was not actually served on the
entity and that failure to respond to a non-served subpoena was not grounds for a new
trial. In Stammen v. Woodruff (Sept. 29, 1981), Darke App. No. 1039, the appellant
argued, inter alia, that the trial court erred in quashing a subpoena duces tecum for a
doctor’s record. The court of appeals affirmed on the grounds that the subpoena was not
served and that the trial court committed no error in quashing the service.
{¶ 16} Capital One admits, however, that it received a subpoena for a related entity
and knew that records and information were needed in an Ohio divorce case. In
Denovchek v. Bd. of Trumbull Cty. Commrs. (1988), 36 Ohio St. 3d 14, 15, 520 N.E.2d
1362, the Supreme Court of Ohio stated: “where that witness has actual knowledge of the
subpoena, a valid service of summons has been completed. Further, we do not approve
of *** action in what appeared to be a willful avoidance of service.” See, also,
State v. Castle (1994), 92 Ohio App. 3d 732, 637 N.E.2d 80, discretionary appeal not
allowed (1994), 69 Ohio St. 3d 1452, 633 N.E.2d 545; State v. Thompson (Dec. 4, 1998),
Clark App. No. 98 CA 7. Thus, this court concludes that the actual receipt and
knowledge of the Capital One Services, Inc. subpoena was a sufficient valid service under
Ohio law to vest the trial court with enough jurisdiction to determine its own jurisdiction.
This court also notes that in the cases upon which Capital One relies, the issue of the
validity of service was resolved on appeal. Thus, at least as to the service issue, the writ
of prohibition will not lie.
{¶ 17} Capital One’s second argument is that even if the subpoena was served, the
respondent judge lacked jurisdiction to enforce the subpoena, because Capital One is
beyond the trial court’s subpoena power. Capital One’s authority for this proposition
just generally recognizes the statewide power of subpoena.1 None of the cases Capital
One relies on provide a definitive proclamation of an Ohio court’s subpoena power.
Rather, the courts are merely noting the scope of the subpoena power in deciding other
issues such as forum non conveniens, the authority of a court to order a party to file an
action in another state, the admission of evidence, and granting a default judgment.
Indeed, Capital One recognizes that there is a “dearth of cases” which adjudicate the
1
In McFarland v. Slattery (Jan. 13, 1983), Cuyahoga App. No. 44434, this court stated: “the subpoena
power of the court did not reach out-of-state witnesses.” (Pg. 2 of the slip opinion.) In Fairmount Richmond
Condominium Assoc. v. Warren Roofing & Insulating Co. (Jan. 24, 1985), Cuyahoga App. No. 48076, this court
noted: “This fact [that the witness was not currently in Cuyahoga County] alone does not place the witness beyond
the statewide subpoena power of the court.” (Pg. 3 of the slip opinion.) Similarly in Stidam v. Butsch, 151 Ohio
App.3d 202, ¶8, 2002-Ohio-6854, 782 N.E.2d 935, the court stated that “[t]he allegedly negligent operation of the
vehicle took place in Indiana, and necessary witnesses would likely be beyond the subpoena powers of an Ohio
court.” In Abraham v. Werner Enterprises, Erie App. No. E-02-013, 2003-Ohio-3091, ¶33, the court stated, “it is
undisputed that Henn lived in Nebraska and was therefore beyond the subpoena power of the court.”
scope of the subpoena power.
{¶ 18} Nevertheless, Capital One characterizes the limitations on subpoena power
as subject matter jurisdiction: “The issue here is whether Respondent had subject
matter jurisdiction to entertain a motion for sanctions based upon a subpoena that was
directed to a non-party, non-domiciliary entity, * * *.” (Pg. 12 of Capital One’s brief in
opposition. Italics and underline in the original brief.) Capital One argues that if the
subpoena was never served or the entity was beyond the subpoena power of the state,
“then such a subpoena can never properly be before the court for adjudication of
sanctions, and constitutes a subject matter over which Ohio courts lack subject matter
jurisdiction.” (Pg. 13 of Capital One’s brief in opposition.) Capital One concludes by
asserting that because it is patent and obvious that service was never made and that it is
an entity outside of the court’s subpoena power, then the respondent is patently and
unambiguously without jurisdiction to conduct the sanctions hearing, and that the element
of an adequate remedy at law need not be considered .
{¶ 19} Subject matter jurisdiction, however, is not at issue in the present case.
“Jurisdiction of the subject matter is defined generally as power of the tribunal to hear
and determine a case because it is one of the class of cases over which the tribunal has
power to exercise jurisdiction.” State ex rel. Vernon Place Extended Care Center, Inc.
v. State Certificate of Need Review Board (Aug. 11, 1983), Franklin App. No.
82AP-1044; and State v. Swiger (1998), 125 Ohio St. 3d 456, 708 N.E.2d 1033. The
United States Supreme Court has emphasized the need to carefully use the terms “subject
matter jurisdiction” and “personal jurisdiction.” “Courts, including this Court, ... have
more than occasionally [mis]used the term ‘jurisdictional’ to describe emphatic time
prescriptions in [claim processing] rules .... Classifying time prescription, even rigid ones,
under the heading ‘subject matter jurisdiction’ can be confounding. Clarity would be
facilitated if courts and litigants used the label ‘jurisdictional’ not for claim-processing
rules, but only for prescriptions delineating the class of cases (subject-matter jurisdiction)
and the persons (personal jurisdiction) falling within a court’s adjudicatory authority.”
Scarborough v. Principi (2004), 541 U.S. 401, 413-414, 158 L. Ed. 2d 674, 124 S. Ct.
1856, quoting Kontrick v. Ryan (2004), 540 U.S. 443, 454-455, 124 S. Ct. 906, 157
L. Ed. 2d 867.
{¶ 20} The respondent judge has subject matter jurisdiction over the underlying
divorce case. R.C. 3105.011. She also has basic subject matter jurisdiction over
discovery, sanctions, and contempt. Civ.R. 45(E). Indeed, the respondent judge has
the inherent power to punish for contempt. “The difference between the jurisdiction of
courts and their inherent powers is too important to be overlooked. In constitutional
governments their jurisdiction is conferred by the provisions of the constitutions and of
statutes enacted in the exercise of legislative authority. That, however, is not true with
respect to such powers as are necessary to the orderly and efficient exercise of
jurisdiction. Such powers, from both their nature and their ancient exercise, must be
regarded as inherent. They do not depend upon express constitutional grant, nor in any
sense upon the legislative will. The power to maintain order, to secure the attendance of
witnesses to the end that the rights of parties may be ascertained, and to enforce process
to the end that effect may be given judgment, must inhere in every court or the purpose of
its creation fails.” State ex rel. Richard v. Cuyahoga Cty. Bd. Of Commrs. (1995), 100
Ohio App. 3d 592, 597, 654 N.E.2d 443, citing Hale v. State (1896), 55 Ohio St. 210, 213,
45 N.E. 199. Thus, the respondent has subject matter jurisdiction, indeed the inherent
power, to adjudicate the matters before her.
{¶ 21} To the extent that personal jurisdiction is at issue, the Supreme Court of
Ohio has ruled “that issuance of a writ of a writ of prohibition based on the alleged lack
of personal jurisdiction is, even more than a claimed lack of subject-matter jurisdiction,
an ‘extremely rare occurrence.” State ex rel. Suburban Constr. Co. v. Skok (1999), 85
Ohio St. 3d 645, 647, citing Clark v. Connor (1998), 82 Ohio St. 3d 309, 315, 695 N.E.2d
751, 757. In such cases, the lack of personal jurisdiction must be premised on the lack
of minimum contacts between the litigant and the forum state. State ex rel. Connor v.
McGough (1989), 46 Ohio St. 3d 188, 546 N.E.2d 407.
{¶ 22} In the present case Capital One maintains sufficient minimum contacts
between itself and Ohio to vest Ohio with personal jurisdiction. Soliciting and
providing credit cards to Ohioans and then enforcing the debt generated thereby provide
sufficient minimum contacts. Indeed, Capital One admits this in its brief in opposition.
(Pg. 6.)
{¶ 23} Skok is particularly informative. In that case the petitioner sought a writ of
prohibition on the grounds, inter alia, that the respondent judge lacked jurisdiction
because the petitioner had not been properly served. In affirming the court of appeals
dismissal of the application for a writ, the Supreme Court of Ohio ruled: “[The] claim is
not cognizable in prohibition. If contested allegations of defective service of process are
not premised upon a complete failure to comply with the minimum-contacts requirement
of constitutional due process, prohibition does not lie.” 85 Ohio St. 3d at 646. The
Supreme Court of Ohio concluded that the proper remedy would be a motion to quash and
an appeal, if necessary. See also, State ex rel. Ruessman v Flanagan (1992), 65 Ohio
St.3d 464, 805 N.E,2d 31; and State ex rel. Gelman v. Lorain Cty. Court of Common
Pleas (1961), 172 Ohio St. 73, 173 N.E.2d 344.2 Thus, lack of personal jurisdiction
does not provide a basis for issuing an extraordinary writ.
{¶ 24} Finally, although Capital One endeavors to characterize the issue as one of
subject matter jurisdiction, this court discerns the issue is really one of territorial
jurisdiction. As shown above, this writ action is not about the classes of cases that
respondent may hear or about the minimum contacts between Capital One and Ohio.
Instead, the issues are whether the subpoena power of Ohio “has been restricted to the
territory of the state” (Capital One’s Brief in opposition, Pg. 7) and what is the
2
The cases cited by Capital One confirm the principle that an appropriate motion in the trial court, followed
by an appeal, if necessary, is an adequate remedy. In State of North Carolina Guilford County AARP v. American
Family Prepaid Legal Corp. (Feb. 23, 2007), Guilford Case No. 06 CVS 10216, 2007 WL 2570841, an out-of-state
entity successfully sought to quash a North Carolina subpoena through a motion to quash, not an extraordinary writ.
In Phillips Petroleum Co. v. OKC Ltd. Partnership, (La. 1994), 634 So. 2d 1186, the out-of-state entity obtained its
desired relief when the Louisiana Supreme Court reversed on appeal the denial of a motion to quash. Similarly, the
Alabama Supreme Court on appeal reversed a contempt citation issued against a non-party foreign corporation for
failing to respond to a subpoena. In re Natl. Contract Poultry Growers’ Ass’n. (Ala. 2000), 771 So. 2d 466. In
Doe I v. Pauliewalnuts (W. D. Va. Sept. 19, 2008), Case No. 5:08MC00001, 2008 WL 4326473, the federal
district court granted a motion to quash an invalid subpoena. Again, in Cuthbertson v. Excel Industries, Inc. (D.
Kan., 1998), 179 F.R.D. 599, the federal district court granted a motion for a protective order, not an extraordinary
writ.
appropriate remedy. Capital One has not cited cases granting prohibition on lack of
territorial jurisdiction, and this court declines to do so. This is the same conclusion
reached by the Supreme Court of Arkansas in Hobbs v. Reynolds (2008), 375 Ark. 313,
289 S.W.2d 917 - territorial jurisdictional claims can be raised on direct appeal, not
through prohibition.
{¶ 25} Accordingly, this court grants the respondent’s motion to dismiss and
dismisses Capital One’s application for writs of mandamus and prohibition. The
alternative writ is no longer in effect. Capital One to pay costs. The clerk is directed to
serve upon the parties notice of this judgment and its date of entry upon the journal.
Civ.R. 58(B).
Writ dismissed.
LARRY A. JONES, JUDGE
MARY EILEEN KILBANE, P.J., and
PATRICIA A. BLACKMON, J.