Hogg v. Grace Community Church , 2022 Ohio 3516 ( 2022 )

[Cite as Hogg v. Grace Community Church, 2022-Ohio-3516.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
FAYETTE COUNTY
ALICE J. HOGG, et al., :
Appellees, : CASE NO. CA2021-11-025
: OPINION
- vs - 10/3/2022
:
GRACE COMMUNITY CHURCH, et al., :
Appellants. :
CIVIL APPEAL FROM FAYETTE COUNTY COURT OF COMMON PLEAS
Case No. CVH20210092
Auman, Mahan & Furry, and Richard L. Carr, Jr. and David M. Rickert, for appellee, Alice
J. Hogg.
Howard Law Office, and R. Jason Howard, for appellee, The Estate of Charles L.
Schroeder.
Dinsmore & Shohl, LLP, and Matthew J. Bakota, for appellant.
PIPER, J.
{¶1} Appellant, G.A. Repple & Company ("Repple"), appeals from the trial court's
order compelling discovery and ordering it to obtain counsel for the purpose of responding
to discovery requests. Repple's timely notice of appeal is primarily aimed at two specific
points regarding the discovery order.
Fayette CA2021-11-025
Procedural Background
{¶2} Charles Schroeder maintained investment accounts with Repple. On March
27, 2019, and April 24, 2019, Charles purportedly signed documents designating Grace
Community Church as the beneficiary of his investment accounts. Charles passed away
on January 13, 2021. Plaintiffs-appellees, Alice Hogg, Steven Schroeder, Kenneth
Schroeder, Faye Diltz, Doris White, Lenore Branson, and Jody Schroeder are Charles'
heirs.
{¶3} On March 29, 2021, the heirs filed a complaint in the Fayette County Court of
Common Pleas against Grace Community Church, Repple, Charles' estate, and others
alleging that the change of beneficiary forms purportedly signed by Charles were forgeries,
the result of undue influence, or were invalid based upon Charles' incompetence. The
complaint sought declaratory judgment that the assets from Charles' investment accounts
are assets of his estate and further sought an injunction prohibiting Repple from transferring
any other funds from Charles' accounts during the pendency of this action.
{¶4} The record shows that Repple was served with the summon and complaint
on April 1, 2021. Repple states that it deliberately did not answer the complaint or otherwise
appear in the matter. On June 18, 2021, the heirs moved for default judgment against
Repple. On June 23, 2021, the trial court granted default judgment against Repple:
IT IS HEREBY ORDERED that Judgment be rendered against
G.A. Repple & Co. in this matter. Specifically, such Defendant
shall be bound by any determination of this Court on Plaintiffs'
claims for relief against Repple, but shall not be heard as part
of the Court's determination of the merits of such claims.
{¶5} Thereafter, the trial court issued an injunction in which it detailed the manner
in which Repple would hold and administer accounts held in the name of Charles or his
estate.
{¶6} On July 23, 2021, the heirs served Repple with interrogatories and requests
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for production. Repple did not respond. After some delay, Repple retained counsel to
communicate with counsel for the heirs. Unable to resolve the matter, the heirs filed a
motion to compel Repple to respond to its discovery requests, which the trial court granted.
The trial court then ordered:
Defendant, G.A. Repple & Company, shall obtain counsel to
represent it for the purpose of responding to discovery requests
in this action, and shall fully respond to Plaintiffs' Joint First Set
of Interrogatories and Joint First Requests for the Production of
Documents which, on July 31, 2021, were served upon
Defendant G.A. Repple & Company. Defendant, G.A. Repple &
Company, shall fully respond to such requests on or before
December 6, 2021.
{¶7} Repple then appeared in the instant action for the first time to appeal the trial
court's order compelling it to respond to the heirs' discovery requests. Repple also filed a
motion for reconsideration and a motion for stay pending appeal. Repple also moved to
deposit the account funds with the court as security for its appeal. Those motions do not
appear to have been addressed below. We now consider Repple's appeal from the trial
court's order compelling it to respond to the heirs' discovery requests and retain counsel.
{¶8} Assignment of Error No. 1:
{¶9} THE TRIAL COURT ERRED IN ITS ORDER COMPELLING DISCOVERY,
DATED OCTOBER 29, 2021 (THE "ORDER"), WHEN IT ORDERED APPELLANT G.A.
REPPLE & COMPANY ("REPPLE") TO OBTAIN LEGAL COUNSEL, APPEAR IN THE
TRIAL COURT ACTION, AND RESPOND TO CIVIL RULE 33 AND 34 WRITTEN
DISCOVERY REQUESTS (THE "DISCOVERY REQUESTS") WHEN REPPLE HAD
NEVER BEFORE APPEARED IN THE ACTION AND HAD NO INTENTION OF EVER
DOING SO.
{¶10} Assignment of Error No. 2:
{¶11} THE TRIAL COURT ERRED IN ITS ORDER WHEN IT ORDERED REPPLE
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TO OBTAIN LEGAL COUNSEL, APPEAR IN THE TRIAL COURT ACTION, AND
RESPOND TO THE DISCOVERY REQUESTS, WHEN A DEFAULT JUDGMENT
ALREADY HAD BEEN ENTERED AGAINST REPPLE.
Repple's Arguments
{¶12} This appeal does not involve the substantive merits of appellees' complaint or
the allegations of fraud, forgery, or undue influence. In this appeal, one party, Repple,
claims not to be a party and therefore argues that it is not required to comply with the trial
court's discovery order. Repple's argument, however, is misconceived.
{¶13} There is no dispute that Repple was named in the complaint and served with
a summons. However, Repple claims that it made a deliberate choice not to participate in
this litigation and therefore accepted default judgment. Repple argues, under its
interpretation of the law, that it is not a party to this litigation because it did not answer or
appear. Repple offers limited authority to support its proposition. Repple relies on Sections
298 and 310 under Judgments in Volume 63 of Ohio Jurisprudence for the proposition that
it had a "rational choice" to allow default judgment in this case. Repple's argument extends
that proposition to claim that it does not need to comply with discovery orders. Repple also
references this court's February 7, 2022 entry in which we granted a motion for
reconsideration of our prior decision dismissing the appeal. Therein, this court stated:
An order that grants or denies a provisional remedy is a final
appealable order. R.C. 2505.02(B)(4). * * * The additional
requirements necessary to make a provisional remedy a final
appealable order are satisfied in this case, as the order in effect
determines the action with respect to the provisional remedy,
and the appealing party will not be afforded a meaningful or
effective remedy on appeal following final judgment. Appellant
is being ordered to appear and participate in discovery in a case
where it was never a party.
{¶14} It appears that the final sentence written above was incorrect and based upon
representations made in requesting that this court reconsider its order of dismissal.
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Nevertheless, Repple claims that this statement is law of the case and therefore is
dispositive to its claim that it is not a party to the litigation.
Repple is a Party
{¶15} As noted above, Repple's position that it is not a party is simply misconceived.
First, law of the case does not apply to this court's February 7, 2022 entry because it was
an interlocutory order that did not constitute a finding on the merits. Frazier v. Rodgers
Builders, 8th Dist. Cuyahoga No. 91987, 2010-Ohio-3058, ¶ 64; Denuit v. Ohio State Bd. of
Pharmacy, 4th Dist. Jackson Nos. 11CA11 and 11CA12, 2013-Ohio-2484, ¶ 19; Dunkle v.
Children's Hosp. Med. Ctr. of Akron, 9th Dist. Summit No. 26612, 2013-Ohio-5555, ¶ 34.
Furthermore, since law-of-the-case doctrine is a rule of practice rather than a binding rule
of substantive law, it is not applied so as to achieve unjust results. Nolan v. Nolan, 11 Ohio
St.3d 1, 3 (1984); Hodge v. Callinan, 12th Dist. Warren No. CA2018-07-073, 2019-Ohio-
1836, ¶ 18.
{¶16} In this case, Repple claims that it is "not a party" because it did not appear in
this matter with counsel and instead was found to be in default. In other words, Repple
claims that it can avoid being named a party, and avoid discovery requests, through its
unilateral actions alone. This argument is without merit as it fails to appreciate the plain
language in Civ.R. 55(A), which refers to a party or parties in default. In relevant part, Civ.R.
55(A) states:
When a party against whom a judgment for affirmative relief is
sought has failed to plead or otherwise defend as provided by
these rules, the party entitled to a judgment by default shall
apply in writing or orally to the court therefore * * *. 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. If, in order to enable the court to enter
judgment or to carry it into effect, it is necessary to take an
account or to determine the amount of damages or to establish
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the truth of any averment by evidence or to make an
investigation of any other matter, the court may conduct such
hearings or order such references as it deems necessary and
proper and shall when applicable accord a right of trial by jury
to the parties.
Civ. R. 55(A) (Emphasis added). As stated therein, there is no requirement that an
individual or entity appear or defend itself in a lawsuit to become a party. Instead, the
individual or entity "party" may be found in default if it fails to plead or otherwise defend
itself. Civ. R. 55 then provides that a party that has appeared must be served with notice
that the opposing party is seeking default judgment. Although it cites Civ. R. 55 in its brief,
Repple does not recognize or explain the apparent contradiction that Civ.R. 55 presents to
Repple's argument.
{¶17} The "not a party" argument raised by Repple also fails for additional reasons.
As the Supreme Court has stated "one becomes a party officially * * * upon service of a
summons or other authority-asserting measure stating the time within which the party
served must appear and defend." Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526
U.S. 344, 350, 119 S.Ct. 1322 (1999). Similarly, in Ohio "[s]ervice of the summons and
complaint is the procedure by which a court having venue and jurisdiction of the subject
matter of the suit asserts jurisdiction over the person of the party served." During v. Quoico,
10th Dist. No. 11AP-735, 2012-Ohio-2990, ¶ 25. Here, the record reflects that Repple was
named in the complaint and was served with the summons on April 1, 2021. Contrary to its
arguments otherwise, Repple is a party in the instant action.
Discovery
{¶18} Since Repple is a party, we must now consider whether it, as a defaulting
party, is subject to discovery beyond that listed in Civ.R. 69 in aid of judgment or execution.
Repple argues that it was improper for the trial court to order it to respond to discovery once
default judgment had been entered against it. Repple cites several cases in support of its
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argument, including Wick v. Lorain Manor, Inc., 9th Dist. Lorain No. 19CA011486, 2021-
Ohio-635; Winkle v. Southdown, Inc., 2d Dist. Greene Case No. 92-CA-107, 1993 Ohio
App. LEXIS 4295, (Sep. 3, 1993); and Damsel v. Shapiro, 10th Dist. Franklin No. 01AP-
107, 2001 Ohio App. LEXIS 4052 (Sep. 13, 2001). However, those cases are inapplicable
as they involve situations where the claims of the party seeking discovery have been
dismissed or fully resolved and there no longer being need for discovery. They do not
address, and have no bearing on, the circumstances in the case at bar where discovery is
being sought from a party who had a default judgment granted against it, but where there
is ongoing litigation between other parties involved in the dispute. Repple's citations do not
involve a party with a default judgment who may possess information that could lead to
admissible evidence in the remaining claims.
{¶19} In the case sub judice, the trial court issued a limited decision granting default
judgment against Repple while the action and claims continue below. The trial court's
decision expressly contemplated that additional proceedings would continue on the heirs'
claims, including issues involving Repple. The trial court determined that the default
judgment against Repple established that it will be bound by any subsequent determination
and that Repple "shall remain a party for purposes of enforcement of this Preliminary
Injunction and other possible issues as they arise." The trial court's findings and
conclusions in this regard are appropriate and consistent with Civ.R. 26, which states
"[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any
party's claim or defense * * *." The use of interrogatories and requests for production of
documents, which Repple has not responded to, are permissible methods of obtaining such
discovery. Civ. R. 33; Civ. R. 34. Although Repple has a default judgment against it, Repple
is not exempt from discovery the trial court deems appropriate.
{¶20} Throughout this appeal, Repple has stated various reasons for why it chose
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to exercise what it characterizes as "the right to decide not to appear in/defend." It claims
that the complaint suggested that the litigants were likely to be involved in "protracted
litigation." Repple claims to have wanted to "stay far away from" this action because of the
nature of allegations, including forgery and legal incompetence. Repple then concluded:
In the face of allegations like that, and with millions of dollars at
stake, Repple also saw that Plaintiffs, the Estate, and the
Church seemed to be cooperating with each other in some
manner. More and more, their filings became "joint" filings, and
they seemed to have their collective sights set on Repple, for
reasons unbeknownst to Repple. None of this appeared to be
anything in which Repple would want to become involved.
{¶21} Meanwhile, the heirs claim that Repple is likely to have discoverable
information. Yet, Repple has repeatedly failed to provide any discovery. Despite Repple's
arguments to the contrary, it is a party to this action. It was named a party in the complaint;
it was served with the summons; and Repple is now subject to the limited decision granting
default judgment against it. Therefore, the trial court did not err by issuing an order
compelling Repple to respond to the heirs' discovery requests and retain counsel. Under
Ohio law, a defendant that is a corporate entity may only appear through a licensed
attorney. Vilardo v. Sheets, 12th Dist. Clermont No. CA2005-09-091, 2006-Ohio-3473, ¶
13, citing Union Savings Assn. v. Home Owners Aid, Inc., 23 Ohio St. 2d 60, 62 (1970).
Repple's two assignments of error are overruled.
{¶22} Judgment affirmed.
M. POWELL, P.J., and BYRNE, J., concur.
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