DG Indus. v. McClure , 2012 Ohio 4035 ( 2012 )

[Cite as DG Indus. v. McClure, 2012-Ohio-4035.]
STATE OF OHIO, MAHONING COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
DG INDUSTRIAL, L.L.C. ) CASE NOS. 11 MA 59
) 11 MA 69
PLAINTIFF-APPELLEE )
)
VS. ) OPINION
)
RALPH K. McCLURE )
)
DEFENDANT-APPELLANT )
CHARACTER OF PROCEEDINGS: Civil Appeal from the Area County Court
Number 3 of Mahoning County, Ohio
Case Nos. 10 CVF 296; 10 CVF 297
JUDGMENT: Affirmed.
APPEARANCES:
For Plaintiff-Appellee: Atty. Kenneth Cardinal
P.O. Box 207
758 North 15th Street
Sebring, Ohio 44672
For Defendant-Appellant: Atty. Rhys B. Cartwright-Jones
42 North Phelps Street
Youngstown, Ohio 44503-1130
JUDGES:
Hon. Cheryl L. Waite
Hon. Joseph J. Vukovich
Hon. Mary DeGenaro
Dated: August 27, 2012
[Cite as DG Indus. v. McClure, 2012-Ohio-4035.]
WAITE, P.J.
Summary
{¶1} Dean E. Grindley, III, filed two separate suits against Appellant Ralph K.
McClure. In his personal capacity, Mr. Grindley sought civil recovery for alleged theft
convictions concerning a credit card account. As the representative for DG Industrial,
L.L.C., Mr. Grindley sought payment of the balance owed on personal loans
Appellant had partially repaid to the company. Appellant received service of both
complaints, which were signed for by his wife on September 28, 2010. Appellant filed
no answer or other motion in response to the complaints. Mr. Grindley sought and
received default judgment in both cases on November 3, 2010. Although the motions
and judgment entries were filed with the Court, they were not properly docketed or
indexed. At some point after Appellant received notice of the judgment entries, he
sought to have both entries set aside and vacated. The trial court denied Appellant’s
motions to set aside default judgment and he appealed. His notice or notices of
appeal, however, do not appear on the docket or index of either case and may have
been filed untimely. Due to some ambiguity as to when the judgment entries denying
his motions were mailed to Appellant, we have allowed both appeals to proceed,
despite the appearance of untimeliness. On review, because Appellant received
service, was in default, and failed to demonstrate that he had a meritorious defense
to present, the judgment of the trial court is affirmed in both cases.
Facts and Procedural History
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{¶2} The issue before us concerns the consolidated appeals of two civil
suits, Mahoning County Case Nos. 2010 CV 00296 and 2010 CV 00297, both
seeking money judgment against the same defendant for the misuse of a credit card
for personal expenses and for failure to repay personal loans. The plaintiff in 2010
CV 00296 is DG Industrial, L.L.C., a business owned by Dean E. Grindley, III, who is
the plaintiff personally in the second suit, 2010 CV 00297. Both suits were filed on
September 20, 2010. They were entered on the docket September 22, 2010 and
service on each was issued the same day. The complaint in case number 2010 CV
00296, which lists the business as Plaintiff, is based on a series of personal loans
that “were to be paid off within one (1) year and capable of being paid in full within
one (1) year.” In the prayer for relief, the complaint alleges that Appellant, made only
partial payment on those loans. Complaint, ¶2-3. In case number 2010 CV 00297,
where Grindley has filed suit personally, the complaint alleges wrongful use and theft
of a credit card for which “Defendant was convicted in the Mahoning County
Common Pleas Court of a theft offense.” Complaint, ¶1-3. Service was obtained on
both complaints on September 28, 2010. Both returns of service were filed on
September 29, 2010.
{¶3} Subsequent to obtaining service, no activity appears on the docket or in
the record of either case until November 3, 2010. On that date, motions seeking
default judgment in both cases were filed and journal entries granting default
judgment were stamped by the clerk and filed, however the motions and judgment
entries granting the motions were mistakenly combined and entered on both dockets
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as only orders granting default judgment. The mistake appears in both cases and
neither motion was ever separately recorded on the docket sheet.
{¶4} Two copies of the docket were transmitted for the business case, 2010
CV 00296. The second copy is the “corrected” docket which accompanied several
documents that appear to have been mis-captioned and initially mis-filed. The
motion for default judgment in the business case appears as pages 2 and 3 of docket
entry No. 17 in the corrected docket and as docket entry 8 in the original docket. The
three pages entered in the record as one document consist of both the motion and
the signed judgment entry. Both copies of the docket for the business case
summarize the November 3, 2010 entry as: “DEFAULT JUDGMENT GRANTED TO
THE PLAINTIFF IN THE AMOUNT: $10,099.00 WITH INT AT 5% FROM MAY 28,
2008 * * * COPIES OF JUDGMENT ENTRY MAILED TO ALL PARTIES.”
{¶5} In the personal case, 2010 CV 00297, the motion for default judgment
filed on November 3, 2010 appears in the record as pages one and two of docket
entry 4, which is summarized on the docket: “DEFAULT JUDGMENT GRANTED TO
THE PLAINTIFF IN THE AMOUNT: $ 8,862.31 INTEREST FROM: DATE OF
JUDGMENT INTEREST RATE: 5% AND COSTS. /S/DIANE VETTORI COPIES OF
JUDGMENT MAILED TO ALL PARTIES.” The summary entry does not mention the
motion for default judgment, nor is there a separate docket entry identifying the
motion. The actual document in the record forwarded to this Court, time-stamped
November 3, 2010, is a motion for default judgment. The signed judgment entry itself
is absent from this file. However, neither party disputes that judgment was granted
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and a journal entry filed on November 3, 2010, or that service of this entry was
completed on all parties.
{¶6} On November 18, 2010, in the case personally filed by Mr. Grindley,
Appellant responded to default judgment by simultaneously filing a motion for leave
to plead, a brief in opposition to plaintiff’s motion for default judgment, and a motion
to set aside default judgment. Grindley responded to Appellant’s filing. The trial
court denied Appellant’s motion to set aside default judgment on February 17, 2011.
The instant appeal appears to have been filed from this ruling.
{¶7} The final docket entries in the personal case, entered on March 17,
2011, concern an issue as to costs. Neither a notice of appeal nor a praecipe for the
transmission of the record was docketed under this case number. The record
transmitted to us does include a notice of appeal, stamped both March 17, 2011 and
April 6, 2011, but the document is captioned DG Industrial, L.L.C. v. McClure (the
caption for the business case, 2010 CV 00296), and although the case number is
correctly listed as 2010 CV 00297, the notice was never docketed or indexed under
either case, despite its appearance in the case file. The record also includes several
motions and a judgment entry denying stay of execution pending appeal, which are
dated from April through June of 2011. All of these documents have the same
apparent error in the caption. They appear to have been originally included in the
record of the business case, 2010 CV 00296, but do not appear on the docket of
either case.
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{¶8} On March 10, 2011, the trial court put on an entry nunc pro tunc in 2010
CV 00297, the case Grindley personally filed, “TO CORRECT THIS ERROR IN THE
RECORD.” This entry reads “ON NOVEMBER 3, 2010, DEFAULT JUDGMENT
WAS GRANTED PLAINTIFF * * * THE ORIGINAL SIGNED COPY OF SAID ENTRY
IS NOT PRESENT IN COURT FILES. THIS NUNC PRO TUNC ENTRY IS
GRANTED TO CORRECT THIS ERROR IN THE RECORD AND REFLECT THE
NOVEMBER 3, 2010 ENTRY IN THE RECORD.” Attached to the nunc pro tunc
entry is a default judgment entry signed by the judge which reflects the same terms
as the docket summary of the missing entry, but is stamped March 10, 2011.
{¶9} In the case filed by Grindley’s business, DG Industrial, L.L.C., default
judgment was also entered on November 3, 2010. Appellant then filed a November
18, 2010 motion to set aside judgment, to which Appellee responded. The trial court
denied this motion on February 17, 2011. Appellant’s notice of appeal, praecipe, and
docketing statement are combined in a single document that appears to have been
filed on April 27, 2011. However, there is no docket entry for these documents.
{¶10} This Court, on May 17, 2011, allowed what would otherwise have been
an untimely appeal, due to ambiguity in the record concerning service of the trial
court’s February 17, 2011 judgment entries. Had we not granted leave, the April 27,
2011 notice of appeal as it regards the business case, which does not appear on the
docket or index of this case, appears to have been filed more than forty days late.
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{¶11} Appellant filed his merit brief in this consolidated appeal. Both
Appellees, Mr. Grindley and DG Industrial L.L.C., have responded in a consolidated
brief. No responsive brief was filed.
ASSIGNMENT OF ERROR
THE TRIAL COURT ERRED BOTH IN ENTERING DEFAULT
JUDGMENT IN FAVOR OF THE PLAINTIFFS IN THESE CASES, AND
IN DENYING THE DEFENDANT’S MOTION FOR RELIEF FROM
DEFAULT JUDGMENT.
{¶12} Appellant makes two arguments under his sole assignment of error: (1)
neither Appellee filed a motion for default judgment in either case and default
judgment cannot be granted by the court sua sponte; and (2) Appellant presented
sufficient grounds for relief under Civ.R. 60(B). Despite Appellant’s contentions,
motions for default judgment appear on the record of both cases, each separately
filed and bearing stamps evidencing receipt by the clerk of courts on the same day.
Neither motion was docketed by the clerk, but this does not alter the fact that each
motion was properly before the court, filed, and made part of the record. As the Ohio
Supreme Court has observed, “the filing of a document does not depend on the
performance of a clerk’s duties. A document is ‘filed’ when it is deposited properly for
filing with the clerk of courts.” Zanesville v. Rouse, 126 Ohio St.3d 1, 2010-Ohio-
2218, 929 N.E.2d 1044, ¶7. In order to place a properly framed, written, motion
before the court, Ohio requires only that the motion be signed by an attorney, bear an
executed certificate of service (when applicable), and be deposited with the clerk of
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courts responsible for the court where the action is pending. Civ.R. 5(A), (D), (E);
Civ.R. 7(B); Civ.R. 11. Here, both motions for default judgment were served on
Appellant. Such service was not required in this instance, however, because
Appellant was a party in default who had never made an appearance in either action.
Civ.R. 5(A). The documents themselves explain the basis for the motions, are signed
by the attorney, were deposited with the clerk and bear a certification stamp. They
clearly comply with all applicable rules.
{¶13} Appellant does not dispute receiving the complaints, the motions for
default judgment, and the judgment entries granting default judgment in both cases.
Because Appellant was properly served with the complaints, but never entered an
appearance or filed an answer in either case, he was not entitled seven days notice
prior to hearing on the motions for default judgment. Civ.R. 55(A). Absent a showing
that he had, in fact, filed an answer or otherwise entered an appearance in these
matters, there is no defect in the decisions granting default judgment. Civ.R. 55(A).
In fact, the result that Appellant advocates, treating any material that does not appear
on the docket as though it was not properly a matter of record despite clear evidence
of filing and journalization, would invalidate his appeal in both cases: none of the
documents Appellant is required to file to initiate an appeal appear on the docket or
index of either case. Appellant was in default of answer and the motions for default
judgment were filed and appear in the record, although they were not properly
docketed. Hence, the trial court’s November 3, 2010 entries granting default
judgment were valid. It is unnecessary to reach the issue of whether a trial court
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may, sua sponte, grant default judgment because the judgments at issue here were
not entered sua sponte.
{¶14} The only remaining issue is whether Appellant presented sufficient
evidence to support his motion to set aside default judgment. Pursuant to Civ.R.
55(B), a motion to set aside default judgment must meet the same requirements as a
Civ.R. 60(B) motion to vacate judgment. Civil Rule 60(B) requires:
[T]he court may relieve a party * * * from a final judgment, order or
proceeding for the following reasons: (1) mistake, inadvertence,
surprise or excusable neglect; (2) newly discovered evidence which by
due diligence could not have been discovered in time to move for a new
trial * * * (3) fraud (whether heretofore denominated intrinsic or
extrinsic), misrepresentation or other misconduct of an adverse party;
(4) the judgment has been satisfied, released or discharged, * * * or it is
no longer equitable * * * (5) any other reason justifying relief.
{¶15} A party seeking relief from judgment under Civ.R. 60(B), or to set aside
a default judgment under the same standards, must meet all three prongs of the GTE
Automatic test. “[T]he movant 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, and * * * [where applicable] not more than one year after
the judgment, order or proceeding was entered or taken.” GTE Automatic Electric,
Inc. v. ARC Industries, Inc., 47 Ohio St.2d 146, 351 N.E.2d 113 (1976) paragraph two
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of the syllabus. Where a party seeks timely relief from a default judgment and the
movant has a meritorious defense, “doubt, if any, should be resolved in favor of the
motion to set aside the judgment so that cases may be decided on their merits.” Id.at paragraph three of the syllabus.
{¶16} The party seeking relief from judgment must allege operative facts with
enough specificity to allow the trial court to decide whether a meritorious defense
exists. Syphard v. Vrable, 141 Ohio App.3d 460, 751 N.E.2d 564 (2001). Actual
evidence supporting the defense is not necessary. Kay v. Marc Glassman Inc., 76
Ohio St.3d 18, 665 N.E.2d 1102 (1996). A reviewing court will not disturb a trial
court's decision concerning motions filed under Civ.R. 60(B) absent an abuse of
discretion. State ex rel. Russo v. Deters, 80 Ohio St.3d 152, 153, 684 N.E.2d 1237,
1238 (1997). “Abuse of discretion” connotes more than an error of law or judgment; it
implies that the trial court's attitude was unreasonable, arbitrary, or unconscionable.
Tracy v. Merrell Dow Pharmaceuticals, Inc., 58 Ohio St.3d 147, 152, 569 N.E.2d 875,
880 (1991).
{¶17} In the matter below, Appellant filed two virtually identical motions in
response to the motions for default judgment filed by Grindley and his business. In
the business case, Appellant filed a motion to set aside default judgment. In the
personal case, a nearly identical document was instead captioned, “brief in
opposition to plaintiff’s motion for default judgment.” Both documents were filed on
November 18, 2010. Excepting the captions and differing typos on the third page of
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each document, the text is identical. Thus, we will review both matters
simultaneously pursuant to the GTE test.
{¶18} With regard to the first prong of the test, which requires some showing
of a meritorious defense, Appellant offers a single sentence: “In fact, Defendant has
legitimate grounds to challenge and defend this case on its merits.” (Brief in
Opposition to Plaintiff’s Motion for Default Judgment, p. 4.) No further information
concerning any defense was provided in either of the matters below. On appeal, for
the first time, Appellant now argues that it was error for the court to grant default
judgment when there were open questions as to whether the alleged loans were valid
under the statute of frauds and where “there is no plea of consideration.”
(Appellant’s Brf., p. 5.) The statute of frauds is an affirmative defense, which is
generally waived if not raised in the pleadings. See, e.g., Houser v. Ohio Historical
Soc., 62 Ohio St.2d 77, 79, 403 N.E.2d 965, 967 (1980); Civ.R. 8(C). Where, as
here, Appellant filed no responsive pleading, the statute of frauds argument has been
waived. In seeking relief from judgment, however, Appellant was still required to
inform the trial court with specificity as to the defenses he believed he could assert
and any basis for relief. Appellant failed to provide the trial court with any such
information, and may not raise it for the first time on appeal. We “will not consider
any error which could have been brought to the trial court’s attention, and hence
avoided or otherwise corrected.” See Schade v. Carnegie Body Co., 70 Ohio St.2d
207, 210, 436 N.E.2d 1001, 1003 (1982).
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{¶19} While it is not necessary that a movant prove he would prevail, or even
present evidence supporting his defense to the lower court, we note that Appellee’s
prayer for relief in the personal case, 2010 CV 00297, was based on theft, not
contract. Therefore, the statute of frauds and lack of consideration are not defenses
to the allegations in the complaint. In the business case, where these alleged
defenses might otherwise apply, the complaint specifically states that the contract fell
outside the statute of frauds, because the personal loan did not concern real property
and the repayment of the loan was capable of being fully performed within one year.
Grindley also pleaded that Appellant partially performed under the agreement and
credited $5,000.00 in payment against the recovery sought. Hence, the allegations
in this complaint preclude both of Appellant’s untimely defenses. In the business
case, 2010 CV 00296, any defect in formation or other defense to contract must be
raised to the trial court or waived. Appellant’s bald assertion to the trial court that he
had “legitimate grounds to challenge and defend” the suit, absent any description of
the operative facts that would allow the trial court to decide whether a meritorious
defense existed, fails to satisfy his burden under GTE in both cases. See, e.g.,
Syphard, supra.{¶20} Again, in order to prevail on appeal, Appellant must show that he meets
all these prongs of the GTE test. Due to Appellant’s failure to discharge his burden
for either case under the first prong, we need not determine whether his failure to
move or plead in response to the complaint was the result of excusable neglect.
Because Appellant failed to demonstrate that he had a meritorious defense to
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present if granted relief from either judgment, this record does not disclose any abuse
of discretion by the trial court. Appellant’s assignment of error is without merit. The
judgments of the trial court are affirmed.
Conclusion
{¶21} Appellant’s sole assignment of error is without merit. The trial court’s
entries granting default judgment were based on a written motion filed by Appellee
which appear in the record of each case. The trial court’s decision denying relief
from judgment was not an abuse of discretion because Appellant failed to meet his
burden to identify a meritorious defense in either case before the trial court.
Appellant’s assignment of error is overruled. The judgment of the trial court in both
cases is affirmed.
Vukovich, J., concurs.
DeGenaro, J., concurs.