Midland Funding, L.L.C. v. Trivers , 2014 Ohio 5557 ( 2014 )

[Cite as Midland Funding, L.L.C. v. Trivers, 2014-Ohio-5557.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 101792
MIDLAND FUNDING, L.L.C.
PLAINTIFF-APPELLEE
vs.
OSCAR TRIVERS
DEFENDANT-APPELLANT
JUDGMENT:
REVERSED AND REMANDED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-14-825236
BEFORE: Keough, J., Boyle, A.J., and Celebrezze, J.
RELEASED AND JOURNALIZED: December 18, 2014
ATTORNEY FOR APPELLANT
Darryl E. Pittman
Pittman & Alexander
2490 Lee Road, Suite 115
Cleveland, Ohio 44118
ATTORNEYS FOR APPELLEE
Jason K. Wright
Sharon G. Petras
Tracy Schwotzer
Daniel Friedlander
Weltman, Weinberg & Reis
323 W. Lakeside Ave., Suite 200
Cleveland, Ohio 44113
KATHLEEN ANN KEOUGH, J.:
{¶1} This cause came to be heard upon the accelerated calendar pursuant to App.R. 11.1
and Loc.R. 11.1. The purpose of an accelerated appeal is to allow the appellate court to render a
brief and conclusory opinion. Crawford v. Eastland Shopping Mall Assn., 11 Ohio App. 3d 158,
463 N.E.2d 655 (10th Dist.1983); App.R. 11.1(E).
{¶2} Defendant-appellant, Oscar Trivers, appeals the trial court’s decision granting the
motion to quash service and the motion to strike filed by the plaintiff-appellant, Midland Funding
L.L.C. d.b.a. Midland Funding DE LLC (“Midland”). For the reasons that follow, we reverse
and remand to the trial court for further proceedings on Trivers’s amended counterclaim.
{¶3} In November 2013, Midland filed suit against “Oscar Trivers” seeking to collect on
an account with Target National Bank and Target Receivables L.L.C. Trivers filed an amended
answer denying that he had an account with Midland or Target. He also filed an amended
counterclaim asserting that Midland violated the Fair Debt Collection Practices Act (“FDCPA”)
and the Ohio Consumer Sales Practices Act because it was attempting to collect a debt from a
non-debtor. After Midland discovered that it filed suit against the wrong “Oscar Trivers,” it
attempted to quash its own service on Trivers. Midland also moved to strike Trivers’s amended
answer and counterclaim asserting that Trivers was a non-party and failed to properly intervene
in the action. In June 2014 and prior to the trial court ruling on these motions, Midland
dismissed its case without prejudice. Trivers’s amended counterclaim against Midland
remained pending until July 2014 when the trial court granted Midland’s motions to quash
service and strike Trivers’s amended answer and counterclaim.
{¶4} Trivers now appeals these rulings raising two assignments of error.
I. Motion to Quash Service
{¶5} In his first assignment of error, Trivers contends that the trial court erred in granting
Midland’s motion to quash service because service on Trivers was properly made and perfected
under Civ.R. 4. We agree.
{¶6} There is no dispute that service on Trivers was perfected pursuant to Civ.R. 4.
Midland argues that the trial court did not abuse its discretion in quashing service because it was
clear that Trivers was not the account holder that Midland intended to bring suit against.
{¶7} While Midland may not have intended to bring suit against this “Oscar Trivers,” it
does not negate the fact that Midland brought suit against Trivers, perfected service on Trivers,
and pursued a cause of action against Trivers. At no time after discovering that Trivers was the
wrong “Oscar Trivers,” did Midland attempt to substitute the proper party pursuant to Civ.R.
15(C) or immediately dismiss its action. Midland’s motion to quash service was merely an
attempt to extinguish Trivers’s right to pursue his counterclaim, by asserting that a non-party
could not bring a claim against Midland.
{¶8} The arguments raised by Midland in this appeal were considered and rejected by the
Seventh District in Midland Funding, LLC v. Stowe, 7th Dist. Columbiana No. 08 CO 32,
2009-Ohio-7084. In Midland Funding, Midland filed suit against the wrong “Donald Stowe”
and after Stowe pursued a counterclaim alleging various causes of actions, including violations
of the FDCPA and the Ohio Consumer Sales Practices Act, Midland moved to dismiss Stowe’s
counterclaim on the basis that Stowe lacked standing, was a non-party, and not the real party in
interest.
{¶9} The Seventh District, after applying the language of Civ.R. 4(C), stated that the fact
that Stowe “was not [a] party to any contract with [the creditor], does not transform him into a
non-party.” Id. at ¶ 17.
{¶10} Applying the same principles and rationale to the case before this court, we find the
court erred in granting Midland’s motion to quash service. Trivers was served with the
summons on the complaint, by certified mail, at his residence address; thus, was a proper
defendant pursuant to Civ.R. 4(C). Midland cannot circumvent Trivers’s right to pursue a
counterclaim by attempting to negate its own actions in pursuing an action against the
non-debtor.
{¶11} Accordingly, Trivers’s first assignment of error is sustained.
II. Motion to Strike Amended Answer and Counterclaim
{¶12} In his second assignment of error, Trivers contends that the trial court erred in
granting Midland’s motion to strike his amended answer and counterclaim because he was a real
party in interest entitled to enforce his rights by filing a counterclaim.
{¶13} Midland moved to strike Trivers’s amended counterclaim asserting that he was a
non-party to the action; thus, he did not have standing to bring an amended counterclaim in this
case. Midland also argued that the amended counterclaim was filed without first obtaining leave
of court.
{¶14} Having previously determined that Trivers was a party to the action, the trial court
also erred in granting Midland’s motion to strike. Interestingly, Midland admits that nothing
prohibits Trivers from bringing an independent cause of action against Midland for a FDCPA
violation. However, we also find that as a real party in interest, Trivers also had the right to
assert his causes of action through a counterclaim.
{¶15} Under Ohio law, any claim against an opposing party, even if not arising from the
same operative facts, may be raised as a counterclaim. See Civ.R. 13(B). A proper and validly
asserted counterclaim by a real party in interest is not extinguished by a plaintiff’s voluntary
dismissal of its claims when the court has jurisdiction to proceed on the counterclaim. Midland
Funding, 7th Dist. Columbiana No. 08 CO 32, 2009-Ohio-7084 at ¶ 23.
{¶16} A real party in interest is “one who is directly benefited [sic] or injured by the
outcome of the case rather than merely having an interest in the action itself.” Midland Funding
at ¶ 18, citing State ex rel. Sinay v. Sodders, 80 Ohio St. 3d 224, 226, 1997-Ohio-344, 685 N.E.2d
754. “When determining whether a defendant is a real party in interest with respect to his
counterclaim, the analysis should focus on the counterclaim itself, not the plaintiff’s original
claim against the defendant.” Id. at ¶ 20.
{¶17} Much like in Midland Funding, Trivers alleged in his amended counterclaim that
he was injured by Midland’s improper collection activities, specifically, that Midland was
negligent in bringing suit against the wrong party. This is a proper cause of action under the
FDCPA. See, e.g., id. at ¶ 2.
{¶18} Insofar as Midland argued that the trial court was correct in striking the amended
counterclaim because Trivers did not receive leave of court, leave was not required because
Midland did not file an answer to Trivers’s original counterclaim. Civ.R. 15(A) provides that a
party may amend its pleading once as a matter of course at any time before a responsive pleading
is filed without first obtaining leave of court.
{¶19} Accordingly, the trial court erred in granting Midland’s motion to strike Trivers’s
amended counterclaim. The second assignment of error is also sustained.
{¶20} Judgment reversed and remanded to the trial court for further proceedings on
Trivers’s amended counterclaim.
It is ordered that appellant recover from appellee costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said 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.
KATHLEEN ANN KEOUGH, JUDGE
MARY J. BOYLE, A.J., and
FRANK D. CELEBREZZE, JR., J., CONCUR