Guiley v. Dewalt , 2017 Ohio 4151 ( 2017 )

[Cite as Guiley v. Dewalt, 2017-Ohio-4151.]
COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
RICHARD R. GUILEY, JUDGES:
ADMINISTRATOR OF THE ESTATE Hon. W. Scott Gwin, P.J.
OF AUDREY J. WILHELM Hon. William B. Hoffman, J.
Hon. John W. Wise, J.
Plaintiff-Appellee
Case No. 2016CA00156
-vs-
CAROL R. DEWALT, ET AL. OPINION
Defendants-Appellees
U.S. BANK NATIONAL ASSOCIATION
Defendant-Appellant
CHARACTER OF PROCEEDING: Appeal from the Stark County Probate
Court, Case No. 226033
JUDGMENT: Affirmed in Part, Reversed and Remanded
In Part
DATE OF JUDGMENT ENTRY: June 5, 2017
APPEARANCES:
For Defendant-Appellant - For Plaintiff-Appellee
U.S. Bank National Association
DEAN KANELLIS RICHARD R. GUILEY
Felty & Lembright, Co., L.P.A. Guiley & Guiley, Co., L.P.A.
1001 Lakeside Avenue, Suite 1300 P.O. Box 35697
Cleveland, Ohio 44114 Canton, Ohio 44735
Stark County, Case No. 2016CA00156 2
Gwin, J.
{¶1} Appellant appeals the July 15, 2016 judgment entry of the Stark County
Court of Common Pleas, Probate Division, granting default judgment against appellant
and in favor of appellee.
Facts & Procedural History
{¶2} On April 28, 2016, appellee Richard R. Guiley, Administrator of the Estate
of Audrey J. Wilhelm, filed a complaint to sell real estate to pay debts. Appellee filed an
amended complaint on April 29, 2016, joining appellant U.S. Bank National Association
as a defendant. The complaint averred that appellant, “possess or claims to possess a
valid interest in the real estate by virtue of an assignment of mortgage * * * dated April
18, 2016 and recorded on April 18, 2016.” It is undisputed that appellant has a valid
mortgage on the property in the unpaid amount of $44,256.43. Decedent signed the
mortgage with Residential Bancorp, and Residential Bancorp assigned the mortgage to
appellant.
{¶3} On May 2, 2016, the trial court issued a summons to appellant. The
summons states, in pertinent part:
(1) YOU ARE HEREBY SUMMONED AND REQUIRED TO SERVE UPON
THE PLAINTIFF'S ATTORNEY A COPY OF YOUR WRITTEN ANSWER
TO THE COMPLAINT WITHIN TWENTY-EIGHT (28) DAYS AFTER THE
SERVICE OF THE SUMMONS ON YOU, EXCLUSIVE OF THE DAY OF
SERVICE.
(2) YOUR WRITTEN ANSWER MUST ALSO BE FILED WITH THE COURT
WITHIN THREE (3) DAYS AFTER THE SERVICE OF A COPY OF THE
ANSWER ON THE PLAINTIFF'S ATTORNEY.
Stark County, Case No. 2016CA00156 3
IF YOU FAIL TO COMPLY WITH PARAGRAPHS (1) AND (2), JUDGMENT
BY DEFAULT WILL BE RENDERED AGAINST YOU FOR THE RELIEF
DEMANDED IN THE COMPLAINT.
{¶4} The trial court docket contains an entry on May 5, 2016 stating, “SUMMONS
RETURNED-SERVED*** NOTICE TO: U.S. BANK NATIONAL ASSOCIATION.” On May
9, 2016, a United States Postal Service domestic return receipt was filed with the trial
court regarding service upon appellant. The receipt indicates service was made by
certified mail; however the receipt is neither signed by a representative of appellant, nor
dated to indicate the date of service. By comparison, the filed return receipts relative to
the other named defendants each contain a signature.
{¶5} On June 10, 2016, appellee filed a motion for default judgment as to various
defendants, including appellant. The motion avers on or before May 9, 2016, service was
successful on the defendants, including appellant. The proof of service of appellee’s
motion for default judgment indicates appellant was served with a copy of the motion by
regular mail on June 8, 2016.
{¶6} On June 13, 2016, appellant filed an answer to the amended complaint with
the trial court without leave of court. The proof of service attached to the answer states
appellant “served a copy of the foregoing Answer on the following parties or their counsel
by Ordinary U.S. Mail, this 7th day of June, 2016.”
{¶7} The trial court issued a judgment entry on July 15, 2016 and granted default
judgment in favor of appellee against appellant. The judgment entry states, “the
complaints were served upon the aforesaid Defendant on or before May 10, 2016,
rendering the answer date for said Defendants on or before June 7, 2016. The aforesaid
Stark County, Case No. 2016CA00156 4
Defendants failed to file an answer or otherwise respond by the prescribed date.” The
trial court’s judgment entry cites Civil Rule 55(A) and (B) in rendering its decision. The
trial court further states, “* * * Defendant U.S. Bank failed to request leave to file its answer
beyond the timeframe prescribed by law and failed to establish that its failure to answer
in a timely manner was due to excusable neglect.”
{¶8} The trial court entered an order of sale and judgment entry finding sale
necessary via separate judgment entries on July 15, 2016. The order of sale was stayed
by the trial court upon motion of appellant with the posting of bond.
{¶9} On August 9, 2016, appellee filed a notice of service on appellant of the
amended complaint. The notice of service avers service of the amended complaint was
perfected on appellant on May 5, 2016 at 9:52 a.m. Appellee attached the electronic
signature of proof of service for the United States Postal Service. The notice of service
will not be considered for purposes of this appeal, as the document was not before the
trial court at the time the trial court granted the motion for default judgment against
appellant.
{¶10} Appellant appeals the July 15, 2016 judgment entry of the Stark County
Court of Common Pleas, Probate Division, and assigns the following as error:
“I. THE PROBATE COURT COMMITTED REVERSIBLE ERROR, AS A MATTER
OF LAW, AND ABUSED ITS DISCRETION, BY GRANTING THE ADMINISTRATOR'S
MOTION FOR DEFAULT JUDGMENT, WHEN U.S. BANK HAD TIMELY SERVED ITS
ANSWER TO THE AMENDED COMPLAINT.
“II. THE PROBATE COURT COMMITTED REVERSIBLE ERROR, AS A MATTER
OF LAW, AND ABUSED ITS DISCRETION, BY ENTERING JUDGMENT BY DEFAULT
Stark County, Case No. 2016CA00156 5
AFTER U.S. BANK HAD SERVED AND FILED ITS ANSWER TO THE AMENDED
COMPLAINT.
“III. THE PROBATE COURT COMMITTED REVERSIBLE ERROR, AS A MATTER
OF LAW, AND ABUSED ITS DISCRETION BY ENTERING JUDGMENT BY DEFAULT
WITHOUT SCHEDULING A HEARING AND PROVIDING U.S. BANK'S COUNSEL WITH
NOTICE THEREOF, AS REQUIRED BY CIVIL RULE 55.”
I. & II.
{¶11} In both its first and second assignments of error, appellant contends the trial
court erred by granting appellee’s motion for default judgment because appellant timely
served and filed its answer to the complaint. We disagree.
{¶12} The trial court docket establishes service of the complaint on appellant on
May 5, 2016. On May 9, 2016, a U.S. Postal Service domestic return receipt reflecting
service on appellant was filed with the trial court. Appellant then had twenty-eight days
to serve its answer, until June 2, 2016, pursuant to Civil Rule 12(A). Appellant filed its
answer with the trial court on June 13, 2016 and served the answer on appellee’s counsel
on June 7, 2016. Accordingly, we find appellant’s answer was untimely. Appellant’s first
and second assignments of error are overruled.
III.
{¶13} In its third assignment of error, appellant argues the trial court erred in
granting default judgment without scheduling a hearing and providing appellant’s counsel
with notice of such hearing. We agree.
{¶14} We first note it is undisputed that appellant has a valid mortgage on the
property in the unpaid amount of $44,256.43.
Stark County, Case No. 2016CA00156 6
{¶15} Civil Rule 55(A) provides, in pertinent part, “If the party against whom
judgment by default is sought has appeared in an action, he (or, if appearing by
representative, his representative), shall be served with written notice of the application
for judgment at least seven days prior to the hearing on such application * * *.
{¶16} Stark County Probate Local Rule 78.7(B) reads,
LOCAL RULE 78.7 – MOTIONS
A. The moving party shall serve and file with the motion a brief written
statement in support of the motion and a list of citations of authorities in
support. Opposing counsel or a party shall serve the response
memorandum on or before the fourteenth (14th) day after the date of service
as set forth on the Certificate of Service attached to the served copy of the
motion.
B. All motions shall be determined upon the pleadings and memorandum in
support. Oral arguments upon motions may be permitted upon written
application and after showing of good cause.
C. When a hearing is granted, the Court shall set the hearing within thirty
(30) days after receipt of the request.
{¶17} For purposes of Civil Rule 55(A), we must first determine whether appellant
“appeared” in the action. As this Court has previously noted, in construing the notice
provisions of Civil Rule 55(A), Ohio courts have liberally interpreted the term “appeared.”
Platinum Financial Services Corp. v. Johnson, 5th Dist. Perry No. 03CA11, 2004-Ohio-
43; Rennicker v. Jackson, 5th Dist. Tuscarawas No. 2003AP090076, 2004-Ohio-3051.
Absent a formal filing, a defendant may appear through informal contracts with the plaintiff
Stark County, Case No. 2016CA00156 7
or with the court; the dispositive concern is whether a defendant demonstrated a clear
intent to defend the suit. Id.
{¶18} We have previously held that a notice of appearance and motion for leave
to file an answer prior to the entry of default judgment but after the motion for default is
filed constituted an appearance for purposes of Civil Rule 55. Rennicker v. Jackson, 5th
Dist. Tuscarawas No. 2003AP090076, 2004-Ohio-3051. Further, we have twice favorably
cited the case of Suki v. Blume, 9 Ohio App. 3d 289, 459 N.E.2d 1311 (8th Dist. 1983) in
our discussion of what constitutes an appearance for purposes of Civil Rule 55. In Suki,
the court found filing an untimely answer without leave of court constitutes an
appearance. Id.
{¶19} In this case, while appellant’s answer was untimely, it was served on
appellee’s counsel on June 7, 2016, one day before appellee’s counsel served the motion
for default on appellant and three days before the motion for default was filed with the
court on June 10, 2016. In these circumstances, we find appellant appeared in the action
for purposes of Civil Rule 55 and thus, pursuant to Civil Rule 55(A), was entitled to be
“served with written notice of the application for judgment at least seven days prior to the
hearing on such application.”
{¶20} This court has repeatedly held that if a party or his or her representative has
appeared as a matter of record, in any manner, the notice and hearing required by Civil
Rule 55(A) must be given to that party before default judgment may be granted. Fifth
Third Mortgage Co. v. Fantine, 5th Dist. Fairfield No. 11 CA 20, 2011-Ohio-4968;
Lawrence v. Primetime Agrimarketing Network, Inc., 5th Dist. Muskingum No. 2007-0051,
2008-Ohio-4968; Platinum Financial Services Corp. v. Jackson, 5th Dist. Perry No.
Stark County, Case No. 2016CA00156 8
03CA11, 2004-Ohio-43; Rennicker v. Jackson, 5th Dist. Tuscarawas No. 2003AP090076,
2004-Ohio-3051; Steinmetz v. Woodgeard, 5th Dist. Fairfield No. 96 CA 46, 1997 WL
219153 (April 10, 1997). We have also held the trial court has discretion as to whether
to hold an oral hearing or a non-oral hearing on a motion for default judgment. Wampum
Hardware Co. v. Moss, 5th Dist. Guernsey Nos. 14 CA 20, 14 CA 17, 2015-Ohio-2564.
{¶21} In this case, while appellant was served with the motion for default,
appellant was never given notice of the date for the oral or non-oral hearing. The purpose
of the notice of the hearing date is so the parties can submit arguments and/or materials
in support or opposition to the motion.
{¶22} Appellee contends this case is analogous to Household Realty v. Kamara,
5th Dist. Delaware No. 13 CAE 07 0054, 2014-Ohio-508, in which we held the local rule
was sufficient to give parties notice and a hearing as contemplated by Civil Rule 55.
However, we find Local Rule 78.7, the local rule at issue in this case, distinguishable from
the local rule at issue in Household Realty v. Kamara, where the motions are
automatically set for non-oral hearing to occur on the twenty-first day following the filing
of the motion. Under Local Rule 78.7, motions are not automatically set for hearing on a
specific date.
{¶23} Further, the local rule of the probate court pertains to motions in general. It
is not a substitute for the provisions of Civil Rule 55. Murphy v. Murphy, 5th Dist. Stark
No. 2005-CA-00101, 2006-Ohio-557 (finding any local rule is unenforceable to the extent
it is inconsistent with the Civil Rules); Wigley v. Fredmont Builders, Inc., 5th Dist. Stark
No. 1997CA00440, 1998 WL 345504 (June 15, 1998) (holding local rules are subservient
to the general rules of civil procedure). Pursuant to Civil Rule 55(A), at least seven days
Stark County, Case No. 2016CA00156 9
prior to the hearing, appellant must be served or otherwise notified of the motion for
default judgment and be informed of the date of the hearing. Because no specific date
was set for the hearing on the motion for default either by the trial court or automatically
set pursuant to Local Rule 78.7, appellant did not receive more than seven days’ notice
of the date of the hearing pursuant to Civil Rule 55(A).
{¶24} Accordingly, appellant’s third assignment of error is sustained.
Stark County, Case No. 2016CA00156 10
{¶25} The July 15, 2016 judgment entry of the Stark County Court of Common
Pleas, Probate Division, is affirmed in part and reversed and remanded in part for further
proceedings in accordance with this opinion.
By: Gwin, P.J., and
Wise, John, J. concur;
Hoffman, J., concurs in
part, dissents in part
Stark County, Case No. 2016CA00156 11
Hoffman, J., concurring in part and dissenting in part,
{¶26} I concur in the majority’s conclusion Appellant’s answer was not timely filed;
therefore, concur in its disposition of Appellant’s first and second assignments of error.
{¶27} I respectfully dissent from the majority’s analysis and disposition of
Appellant’s third assignment of error. I do so fully aware U.S. Bank has a valid mortgage
in the amount of $44,256.43, against the property. In support of my decision, I offer the
following analysis.
{¶28} On June 10, 2016, Appellee filed the motion for default judgment, with proof
of service upon U.S. Bank.1 Civil Rule 55 requires, "If the party against whom judgment
by default is sought has appeared in the action, he (or, if appearing by representative, his
representative) shall be served with written notice of the application for judgment at least
seven days prior to the hearing on such application."
{¶29} U.S. Bank made its first “formal” appearance in the action on June 13, 2016,
the date it filed its answer in the trial court. If such date constituted its first “appearance”
in the action, written notice of the application for default judgment would not have been
required to be served on U.S. Bank, as U.S. Bank had not yet “formally” appeared in the
action at the time the application for default judgment was filed. However, Appellee did
gratuitously serve the written motion upon U.S. Bank on June 8, 2016, as indicated in the
proof of service.
{¶30} I am in agreement with the majority U.S. Bank appeared in the action. But,
the question becomes when did it first appear.
1
Service was completed on U.S. Bank, not counsel for U.S. Bank.
Stark County, Case No. 2016CA00156 12
{¶31} Arguably [and as found by the majority], U.S. Bank “informally” appeared in
the action, at the very earliest, on June 7, 2016, when it sent, via Ordinary U.S. Mail, its
answer to Appellee’s counsel. However, it is unreasonable to believe Appellee’s counsel
would have received the answer that same day or even the next day, given normal mail
processing. The fact Appellee’s counsel’s proof of service of its motion for default
judgment was sent via regular U.S. mail on June 8, 2016, to U.S. Bank (as opposed to
counsel for U.S. Bank), lends support to the conclusion Appellee’s counsel was first
notified of U.S. Bank’s intent to defend the suit after June 8, 2016.2, 3
{¶32} Assuming, arguendo,4 U.S. Bank appeared on June 7, 2016, the question
becomes what is the effect of such appearance. The majority maintains U.S. Bank’s
appearance entitled it to notice of the date for hearing before default judgment may be
granted. However, I interpret Civil Rule 55(A) as only requiring written notice of the
application for default judgment, not written notice of the date of hearing. If U.S. Bank is
considered to have “informally” appeared on June 7, 2016, it was entitled to written notice
of the application for judgment at least seven days prior to the hearing on such application.
As noted supra, U.S. Bank did receive written notice of the application when Appellee’s
counsel served U.S. Bank a copy of the motion for default judgment on June 8, 2016.5
2
This is why I found Appellee “gratuitously” served U.S. Bank notice of the application for
default judgment pursuant in Civ. R. 55.
3
It appears likely U.S. Bank’s answer and Appellee’s motion for default judgment
crossed in the mail.
4
In my dissent in Rennicker v. Jackson, 5th Dist. Tuscarawas No 2003AP090076, 2004-
Ohio-3051, I concluded if a defendant first appears after the plaintiff files a motion for
default judgment, the seven day notice requirement in Civ.R. 55(A) does not apply.
5
I acknowledge U.S. Bank may not have received the copy before June 10, 2016.
Stark County, Case No. 2016CA00156 13
{¶33} Pursuant to Local Rule 78.7, U.S. Bank then had fourteen days from the
receipt of the motion to serve a response thereto. U.S. Bank failed to do so.
{¶34} The rule provides, all motions “shall be determined upon the pleadings and
memorandum in support. Oral arguments upon motions may be permitted upon written
application and after a showing of good cause.” I find the rule contemplates a non-oral
hearing on the motion for default judgment, to be determined upon the pleadings and the
memorandum in support. U.S. Bank did not file a response memorandum or make a
written application for oral argument or otherwise show good cause for the trial court to
conduct an oral hearing on the motion.
{¶35} I find the trial court complied with both the civil and local rules in granting
Appellee’s motion for default judgment. U.S. Bank had more than seven days notice
before the earliest time the motion could be determined under the local rule (June 24,
2016). I do not read Civil R. 55 to specifically require a separate written notice of the date
of the hearing on the motion. Although the trial court did not issue its decision until July
15, 2016, Appellee never filed anything in opposition to the motion before then.6
{¶36} When coupled with my conclusion Local R. 78.7 provides a “de-facto” notice
of a non-oral hearing date 14 days after the motion was filed, I find U.S. Bank effectively
received the requisite 7 day notice. As this Court previously observed, a trial court has
discretion to hold an oral or non-oral hearing on a motion for default judgment. Wampum
Hardware Co. v. Moss, 5th Dist. Guernsey Nos. 14CA20, 14CA17, 2015-Ohio-2564.
6
I concede the distinction the majority makes between the local rule in this case and the
local rule this Court analyzed in Household Reality, supra. Unlike the majority, I find it to
be a distinction without a difference. Here, the non-oral hearing could occur as early as
14 days after the motion; therefore, Appellant was on notice.
Stark County, Case No. 2016CA00156 14
{¶37} I would also overrule Appellant’s third assignment of error and affirm the
decision of the trial court.