Auto Loan, Inc. v. Sisler

2022 Ohio 3282

• Court: Ohio Court of Appeals
• Decided: September 19, 2022
• Docket: 2021-P-0099
• Status: Published

Opinion

[Cite as Auto Loan, Inc. v. Sisler, 2022-Ohio-3282.]

IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT PORTAGE COUNTY AUTO LOAN, INC., CASE NO. 2021-P-0099

Plaintiff-Appellee, Civil Appeal from the -v- Municipal Court, Kent Division

SARAH R. SISLER, Trial Court No. 2020 CVF 01082 K Defendant-Appellant.

OPINION

Decided: September 19, 2022 Judgment: Affirmed in part, reversed in part, and remanded

Tracee D. Hilton-Rorar, 80 Thorlone Avenue, Akron, OH 44312 (For Plaintiff-Appellee).

Jason M. Rebraca, Johnson & Johnson Law Firm, 12 West Main Street, Canfield, OH 44406; Michael L. Berler, Ronald I. Frederick, and Michael L. Fine, Frederick & Berler LLC, 767 East 185th Street, Cleveland, OH 44119 (For Defendant-Appellant).

CYNTHIA WESTCOTT RICE, J.

{¶1} Appellant, Sarah R. Sisler, appeals the September 10, 2021 order of the

Portage County Municipal Court, Kent Division, adopting the Magistrate’s Decision

granting the motion to dismiss filed by appellee, Auto Loan, Inc. For the reasons set forth

herein, the judgment is affirmed in part, reversed in part, and remanded.

{¶2} In September 2020, Auto Loan, Inc. filed a small claims action against Ms.

Sisler alleging she owed it approximately $4,000 plus interest as a result of a breach of

the Retail Installment Contract and Security Agreement Ms. Sisler signed. Ms. Sisler filed an answer, a counterclaim, and a motion to transfer the matter to the general division of

the municipal court. The court granted the motion to transfer.

{¶3} Auto Loan, Inc. filed a motion to dismiss Ms. Sisler’s counterclaim; Ms.

Sisler filed a class action counterclaim, which Auto Loan, Inc. moved to strike and the

court denied. The class action counterclaim was amended, and Auto Loan, Inc. moved

to dismiss it and a motion to transfer to small claims court.

{¶4} The matter was heard before a Magistrate who ordered, inter alia, that the

motion to transfer to small claims court be denied. It also found that Auto Loan, Inc. did

not improperly file actions in the small claims division of the municipal court because it is

not an assignee pursuant to R.C. 1925.02(A)(2)(ii) and it did not file complaints exceeding

the small claims division monetary jurisdictional limits. It also found that a declaratory

judgment was not the proper method to determine if prior judgments have been properly

adjudicated. In so finding, the Magistrate granted Auto Loan, Inc.’s motion to dismiss the

First Amended Class Action Counterclaim.

{¶5} Upon review, the municipal court adopted the magistrate’s decision as part

of its judgment. Ms. Sisler now appeals the dismissal of her class action counterclaim,

assigning three errors for our review. The first states:

{¶6} The Trial Court erred in finding that Auto Loan, Inc. is not an “assignee” under R.C. § 1925.02(A)(2)(ii) because it received its assignment of rights before a legal cause of action accrued with respect to those rights.

{¶7} Ms. Sisler argues this court should review the dismissal pursuant to Civ.R.

12(B)(6) de novo, while Auto Loan argues that because Ms. Sisler did not provide a

transcript of the hearings to the trial court which reviewed the magistrate’s findings, both

this court and the trial court must accept all the magistrate’s factual findings as true and 2

Case No. 2021-P-0099 review only for plain error. It is undisputed that Ms. Sisler did not provide the trial court

with a transcript of the hearing; she maintains, however, that she only raised questions of

law, making the inclusion of a transcript unnecessary. Conversely, inherent in Auto

Loan’s argument is its belief that the matter of whether Auto Loan is an assignee as

contemplated by R.C. 1925.02(A)(2)(ii) is a question of fact.

{¶8} This court had previously stated “whether one is an assignee is a question

of fact to be determined by the trier of fact * * *.” Lakeside Utilities Corp. v. Detrick, 11th

Dist. Ashtabula No. 1093, 1982 WL 5796, *4 (June 25, 1982), citing Smith v. Barrick, 151

Ohio St. 201 (1949). Accordingly, without the transcript of the hearing before the

magistrate, the trial court was required to accept the factual findings, including the finding

that Auto Loan was not an assignee, as true. Estate of Stepien v. Robinson, 11th Dist.

Lake No. 2013-L-001, 2013-Ohio-4306, ¶28, citing State ex rel. Duncan v. Chippewa

Twp. Trustees, 73 Ohio St.3d 728, 730 (1995) (“When a party fails to file a transcript of

the evidence presented at the magistrate’s hearing, the trial court, when ruling on the

objections, is required to accept the magistrate's findings of fact and to review only the

magistrate’s conclusions of law based on those factual findings.”). Similarly, our review

on this finding of fact is reviewed for plain error. State ex rel. Pallone v. Ohio Court of

Claims, 143 Ohio St.3d 493, 2015-Ohio-2003, ¶11; see also DiNunzio v. DiNunzio, 11th

Dist. Lake No. 2006-L-106, 2007-Ohio-2578, ¶16. “‘Plain error’ is often construed to

encompass ‘error[s] of law or other defect[s] evident on the face of the magistrate’s

decision,’ which prohibit the adoption of a magistrate’s decision even in the absence of

objections.” Id. quoting Civ.R. 53(D)(4)(c). “[A]n appellate court will only reverse if it finds

the trial court adopted the magistrate’s decision when there was clear error of law or other

Case No. 2021-P-0099 defect on its face.” Smith v. Treadwell, 11th Dist. Lake No. 2009-L-150, 2010-Ohio-2682,

¶25.

{¶9} The face of the contract clearly shows the agreement was assigned to Auto

Loan. However, the Magistrate found that Auto Loan was not an assignee as was

intended by the drafter of R.C. 1925.02(A)(2)(a)(ii). On appeal, Auto Loan contends that

the intent behind the general prohibition of assignee use of small claims court actions is

to prevent collection agencies from using small claims court to bring such actions.

However, there is no indication of this intent in the Ohio legislative history.

{¶10} “Unambiguous statutes are to be applied according to the plain meaning of

the words used * * *.” State ex rel. Burrows v. Indus. Comm., 78 Ohio St.3d 78, 81 (1997).

Black’s Law Dictionary defines assignee as “[s]omeone to whom property rights or powers

are transferred by another.” ASSIGNEE, Black’s Law Dictionary (11th ed. 2019). The

drafters of R.C. 1925.02 could have limited the prohibition on assignments to, for

example, assignments that occurred after the cause of action accrued. The statute

includes no such limiting language but wholly excludes claims brought by assignees. The

language of R.C. 1925.02(A)(2) unambiguously excludes assignees from the small claim

court’s jurisdiction. Courts must apply the plain meaning of statutes, without inserting or

deleting words. Burrows, supra.

{¶11} Accordingly, we find the magistrate committed plain error by finding that

Auto Loan was not an assignee. Ms. Sisler’s first assignment of error has merit.

{¶12} Her second states:

{¶13} The Trial Court erred in finding that claims for interest that accrued prior to the filing of a Small Claim Action are not included in calculating the $6,000 jurisdictional limit under R.C. § 1925.02(A)(1).

Case No. 2021-P-0099 {¶14} Ms. Sisler’s argument under this assigned error is that because the

Municipal Court lacks subject-matter jurisdiction over cases seeking over $15,000

exclusive of post-judgment interest, the small claims court is likewise limited. Auto Loan

asks us to give R.C. 1925.02(A)(1) it’s plain meaning.

{¶15} R.C. 1901.17 governs the monetary limit of the Municipal Court and states,

in pertinent part:

{¶16} A municipal court shall have original jurisdiction only in those cases in which the amount claimed by any party, or the appraised value of the personal property sought to be recovered, does not exceed fifteen thousand dollars * * *.

{¶17} Judgment may be rendered in excess of the jurisdictional amount, when the excess consists of interest, damages for the detention of personal property, or costs accrued after the commencement of the action. (Emphasis added.)

{¶18} Stated differently, the monetary limit for the Municipal Court is $15,000

including interest accrued before the commencement of the action. Ms. Sisler asks us to

apply this standard to the small claims court. However, the statute governing the

monetary limit of the small claims court, R.C. 1925.02, contains no such language. R.C.

1925.02(A)(1) states:

{¶19} Except as provided in division (A)(2) of this section, a small claims division established under section 1925.01 of the Revised Code has jurisdiction in civil actions for the recovery of taxes and money only, for amounts not exceeding six thousand dollars, exclusive of interest and costs. (Emphasis added.)

{¶20} The drafters of R.C. 1925.02(A)(1) chose to remove the language regarding

interest “accrued after the commencement of the action” and instead excluded all interest

and costs. The language of R.C. 1925.02(A)(1) is clear and unambiguously excludes

Case No. 2021-P-0099 interest. Since Auto Loan claimed less than the statutory limit, not including interest, the

court did not lack subject-matter jurisdiction over the case.

{¶21} Accordingly, Ms. Sisler’s second assignment of error is without merit.

{¶22} Her third states:

{¶23} The Trial Court erred in ruling that Appellant failed [to] state a claim for declaratory relief.

{¶24} “A declaratory judgment action is a civil action, and provides a remedy in

addition to other legal and equitable remedies available. * * * It is well-settled that the trial

court’s decision to grant or deny declaratory relief will not be overturned on appeal absent

a finding of abuse of discretion.” (Citations omitted.) Gotel v. Ganshiemer, 11th Dist.

Ashtabula No. 2008-A-0070, 2009-Ohio-5423, ¶10.

{¶25} “In order to properly plead a complaint seeking declaratory relief, the plaintiff

must demonstrate that (1) the action is within the scope of the Declaratory Judgment Act;

(2) a justiciable controversy exists between adverse parties; and (3) speedy relief is

necessary to preserve rights that may otherwise be impaired. A complaint seeking

declaratory relief under R.C. Chapter 2721 must be dismissed where it does not meet

any of those requirements.” (Citations omitted.) Tabbaa v. Lexpro, L.L.C., 8th Dist.

Cuyahoga Nos. 109690 and 109691, 2020-Ohio-5514, ¶5.

{¶26} The Magistrate determined that while the municipal court has jurisdiction to

enter declaratory judgments, “declaratory judgments are an improper method to

determine if prior judgment has been properly adjudicated,” that Auto Loan was not an

assignee, which implies a finding that there is no justiciable controversy, and that Ms.

Sisler did not show that speedy relief was necessary to preserve rights that may otherwise

be impaired. 6

Case No. 2021-P-0099 {¶27} First, we note that the magistrate’s determination that declaratory

judgments are an improper method to determine if a prior judgment has been properly

adjudicated is generally, but not universally, true. For example, the notes related to Civ.R.

60 state, “[t]he vacation of a void judgment might be brought in the form of a motion or

perhaps in the form of a procedural device such as a declaratory judgment action.” Civ.R.

60. See also Old Meadow Farm Co. v. Petrowski, 11th Dist. Geauga No. 2000-G-2265,

2001 WL 209066, fn. 3 (Mar.2, 2001) (“[A] party wishing to contest a court’s jurisdiction

should either file a simple motion to vacate, or in the alternative, file a declaratory

judgment action.”)

{¶28} This is precisely what Ms. Sisler is seeking in this case. Contrary to Auto

Loan’s contention, Ms. Sisler is not arguing the prior judgments are voidable; she is

arguing they are already inherently void for lack of subject-matter jurisdiction.

{¶29} Auto Loan cites Tabbaa, supra, in support of their argument that declaratory

judgment is inappropriate to collaterally attack the validity of the judgment. However,

Tabbaa dealt with a collateral attack on the validity of a judgement of a different court.

Here, Ms. Sisler is not collaterally attacking the validity of the judgment rendered by

another court; instead, she argues that the prior judgments by the small claims court are

void for lack of subject-matter jurisdiction.

{¶30} Moreover, as discussed under her first assignment of error, the Magistrate’s

determination that Auto Loan was not an assignee as contemplated by R.C. 1925.02,

which served as a basis for denying Ms. Sisler’s counterclaim, was erroneous.

Accordingly, the court’s implicit determination that there was no justiciable controversy

between the parties was erroneous.

Case No. 2021-P-0099 {¶31} Finally, Ms. Sisler was also required to show that speedy relief was

necessary to preserve rights that may otherwise be impaired. Ms. Sisler argues that she

made a prima facie case for speedy relief by noting that Auto Loan’s actions are habitual,

persistent, vexatious, regularly filed, and that they are likely to continue these practices.

However, allegations of future errors that may or may not involve her as a party do not

show the need for speedy relief.

{¶32} Nevertheless, Ms. Sisler seeks relief from a judgment against her, and

others like her, which she argues is void for lack of subject-matter jurisdiction. We

conclude that seeking relief from a void judgment inherently shows the necessity of

speedy relief because the person against whom the void judgment is entered is either

subject to a judgment erroneously entered against them or risks the consequences of

non-compliance with the judgment which has not yet been deemed void.

{¶33} Accordingly, because there was a justiciable controversy, and Ms. Sisler

showed the necessity of speedy relief, we find her declaratory judgment was erroneously

denied.

{¶34} Accordingly, Ms. Sisler’s third assignment of error has merit.

{¶35} In light of the foregoing, the judgment of the Portage County Municipal

Court, Kent Division, is affirmed in part, reversed in part, and remanded.

MATT LYNCH, J., concurs,

JOHN J. EKLUND, J., concurs in judgment only.

Case No. 2021-P-0099