Carter-Jones Lumber Co. v. JCA Rentals, L.L.C.

2013 Ohio 863

• Court: Ohio Court of Appeals
• Decided: March 8, 2013
• Docket: 12 MA 56
• Status: Published

Opinion

[Cite as Carter-Jones Lumber Co. v. JCA Rentals, L.L.C., 2013-Ohio-863.] STATE OF OHIO, MAHONING COUNTY

IN THE COURT OF APPEALS

SEVENTH DISTRICT

CARTER-JONES LUMBER CO. ) CASE NO. 12 MA 56 ) PLAINTIFF-APPELLEE ) ) VS. ) OPINION ) JCA RENTALS, LLC ) ) DEFENDANT-APPELLANT )

CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common Pleas of Mahoning County, Ohio Case No. 09 CV 1985

JUDGMENT: Affirmed.

APPEARANCES:

For Plaintiff-Appellee: Atty. Todd A. Harpst Atty. Katherine S. Knouff Daily Harpst, Ltd. 2475 Massillon Road Akron, Ohio 44312

For Defendant-Appellant: Atty. James E. Lanzo 4126 Youngstown-Poland Road Youngstown, Ohio 44514

JUDGES:

Hon. Cheryl L. Waite Hon. Gene Donofrio Hon. Joseph J. Vukovich Dated: March 8, 2013 [Cite as Carter-Jones Lumber Co. v. JCA Rentals, L.L.C., 2013-Ohio-863.] WAITE, J.

{¶1} Appellant JCA Rentals, LLC appeals the judgment of the Mahoning

County Court of Common Pleas granting default judgment to Appellee Carter-Jones

Lumber Co. (“Carter-Jones Lumber”). Appellant contends that it filed a motion for

judgment on the pleadings that should have been granted in its favor, but a review of

the record reflects no such motion was filed. Appellant filed a motion to quash

discovery, not a motion for judgment on the pleadings. Appellant also argues that

default judgment should not have been granted because Appellant's counsel was ill

during the discovery process. Counsel’s illness purportedly led to a variety of lapses

in responding to discovery requests, leading to discovery sanctions and ultimately

providing the basis for default judgment. The record indicates that counsel failed to

promptly notify the court of the illness, and the time period during which counsel was

apparently ill does not explain or coincide with many of the deadlines that were

missed, the failures to attend hearings, and the failure to even respond to the motion

for default judgment itself. Further, the record reveals that Appellant’s failure to

cooperate in this case was willful, and default judgment is proper for willful refusal to

abide by discovery requests and orders. The judgment of the trial court is affirmed.

{¶2} On May 28, 2009, Carter-Jones Lumber filed a complaint against

Appellant for fraudulent transfer. The complaint alleged that Appellant was owned or

controlled by James M. Clifton, and that Carter-Jones Lumber had obtained a

judgment against Clifton on June 28, 2007, for $10,704.15, plus interest. The

complaint alleged that the judgment had not been paid. The complaint alleged that

Clifton had fraudulently conveyed property to Appellant for no value. In the -2-

complaint, Carter-Jones Lumber sought judgment against Appellant in the same

amount as the judgment it had previously obtained against Clifton.

{¶3} Appellant filed an answer on July 7, 2009. The answer did not raise

any issues of personal or subject matter jurisdiction, or venue.

{¶4} Carter-Jones Lumber filed a notice of discovery on August 25, 2009,

consisting of Carter-Jones Lumber's first set of interrogatories, first set of request for

admissions, and its request for production of documents. Appellant did not reply to

the discovery request.

{¶5} On September 14, 2009, Carter-Jones Lumber filed a notice to take the

deposition of Anita Dintino, an officer or principal of Appellant, on October 22, 2009.

{¶6} On October 2, 2009, Appellant filed a “Motion to Quash All Discovery.”

In the motion, Appellant attempted to raise certain defenses to the action, such as

improper venue, lack of nexus between Appellant and Clifton, creditor fraud, res

judicata, improper timing of the fraudulent transfer, and unclean hands. Appellant

cited no caselaw, and did not explain how any of its arguments created a reason for

the court to quash discovery. No mention was made at this time that counsel was

suffering from any illness that prevented compliance with discovery. Carter-Jones

Lumber filed a memorandum opposing the motion to quash on October 21, 2009.

{¶7} On October 5, 2009, Carter-Jones Lumber filed a motion to deem

matters admitted, based on the fact that it had requested admissions on August 21,

2009, and that more than 28 days had elapsed without a response. Civ.R. 36(A) -3-

states that a matter is deemed admitted unless an answer or objection is made within

28 days.

{¶8} On October 28, 2009, Carter-Jones Lumber filed a motion to compel

discovery. The motion noted that Appellant had failed to respond to the prior

requests for discovery or the notice of deposition, and that more than 28 days had

passed. Appellant did not respond to this motion.

{¶9} On January 8, 2010, the court overruled Appellant's motion to quash,

and sustained Carter-Jones Lumber's motion to deem matters admitted and motion

to compel discovery.

{¶10} A status hearing was set for March 4, 2010, but Appellant failed to

appear. The court was advised that Appellant still had not answered any

interrogatories.

{¶11} On March 9, 2010, Carter-Jones Lumber filed a motion for default

judgment. Carter-Jones Lumber requested the default judgment as a sanction for

Appellant's discovery violations under Civ.R. 37. Civ.R. 37(B)(2)(c) allows the court

to grant default judgment as a sanction for violation of discovery rules and orders.

The matter was referred to a magistrate.

{¶12} On June 7, 2010, Appellant filed a motion to vacate the order of

January 8, 2010. Here, for the first time, counsel states that she was incapacitated

due to serious illness at or near the time the order was issued. The court denied the

motion to vacate on July 8, 2010. -4-

{¶13} Also on June 7, 2010, Appellant filed a motion to enlarge the time for

discovery, as well as a “Brief in Opposition to Motion for Summary Judgment.” The

record indicates that no summary judgment motion had yet been filed in this action.

In its brief, Appellant attacked the merits of Carter-Jones Lumber's claim, but did not

address the issues regarding discovery; neither did Appellant challenge the decision

to grant default judgment as a sanction for Appellant's discovery violations. Counsel

once again noted that she had been ill. The court denied the motion on July 8, 2010.

{¶14} The magistrate granted default judgment to Carter-Jones Lumber on

June 24, 2010.

{¶15} On July 14, 2010, Appellant filed objections to the magistrate's

decision. Counsel argued that she had been ill, that Carter-Jones Lumber never

called with a new date for the deposition, and that counsel wrote down the wrong day

for the hearing she missed. No law was cited as to why these might constitute legally

valid reasons to overturn the magistrate's decision. Carter-Jones Lumber filed a

responsive memo on August 4, 2010.

{¶16} On July 30, 2010, Appellant's counsel filed a motion to withdraw. In the

motion counsel stated that she became ill beginning in November of 2009, that her

client had not paid her retainer fee, and that there had been a complete breakdown in

the relationship between counsel and client. At this point in the record, various

handwritten pro se documents started to appear on behalf of Appellant. -5-

{¶17} On February 22, 2012, the trial court overruled the objections and

adopted the magistrate's decision, granting default judgment to Carter-Jones

Lumber. This timey appeal followed.

ASSIGNMENT OF ERROR NO. 1

THE TRIAL COURT ERRED WHEN IT FAILED TO GRANT THE

DEFENDANT-APPELLANTS’ MOTION FOR JUDGMENT UPON THE

PLEADINGS PURSUANT TO CIVIL RULE 12 (C) ERRONEOUSLY

TITLED “MOTION TO QUASH ALL DISCOVERY.”

{¶18} Appellant contends that the trial court erred when it failed to grant a

motion for judgment on the pleadings in its favor. This argument is baseless,

because there is no such motion filed of record.

{¶19} Appellant contends that a motion dated October 2, 2009, captioned

“Motion to Quash All Discovery” was, in actuality, a motion for judgment on the

pleadings. A court is entitled to rely on the caption of a motion when ruling on it, but

also has the discretion to construe the motion based on the contents in the body of

the motion, itself. Downtown Properties Ltd. v. Haddad, 8th Dist. No. 96023, 2011-

Ohio-4117, ¶12. In this case, the trial court reasonably took the motion at face value

as a motion to quash based on the caption of the motion.

{¶20} More importantly, there is nothing contained in Appellant’s motion to

quash that could be construed as seeking a motion for judgment on the pleadings. A

motion for judgment on the pleadings pursuant to Civ.R. 12(C) tests the sufficiency of

the complaint. State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs., 65 Ohio St.3d -6-

545, 548, 605 N.E.2d 378 (1992). A party may move for judgment on the pleadings

after the pleadings are closed but within such time as not to delay the trial. This type

of motion has been characterized as a belated Civ.R. 12(B)(6) motion to dismiss for

failure to state a claim. State ex rel. Pirman v. Money, 69 Ohio St.3d 591, 592, 635

N.E.2d 26 (1994).

{¶21} In ruling on Civ.R. 12(C) motions, the Ohio Supreme Court has stated:

In applying the Civ.R. 12(C) standard, judgment on the pleadings may

be granted where no material factual issue exists and the moving party

is entitled to judgment as a matter of law. The determination is

restricted solely to the allegations of the pleadings and the nonmoving

party is entitled to have all material allegations in the complaint, with all

reasonable inferences to be drawn therefrom, construed in her favor as

true. (Internal citation omitted.)

Id. at 592-593, 635 N.E.2d 26.

{¶22} The motion to quash cites no law relevant to judgment on the

pleadings. Instead, the body of the motion argues that discovery is being sought in

an improper venue, that there is no nexus between Appellant and Mr. Clifton, that

Appellant is an innocent bystander in the transaction, that Carter-Jones Lumber is

engaging in creditor fraud, that res judicata applies, and that the property in question

was transferred to Appellant after Carter-Jones Lumber had received its judgment

against Clifton. In essence, the motion asserts a number of defenses to suit. While

the relief requested was to quash all discovery and also to dismiss the complaint, -7-

nowhere in the motion does Appellant assert that Carter-Jones Lumber can present

no set of facts to prove its claim.

{¶23} The only arguable point of law that can be gleaned from the motion to

quash that may relate to possible dismissal is that the complaint alleges that the

fraudulent transfer occurred in 2005, but the debt that Carter-Jones Lumber was

attempting to collect arose in 2007. In other words, the alleged fraud occurred before

the corresponding debt arose. Appellant appears to assume that one may only

attempt to collect on fraudulent transfers that occur after a debt or obligation is

incurred. As pointed out by Carter-Jones Lumber though, R.C. 1336.04 allows for a

civil action on fraudulent transfers “before or after” the debt that a plaintiff is

attempting to collect was incurred: “(A) A transfer made or an obligation incurred by

a debtor is fraudulent as to a creditor, whether the claim of the creditor arose before

or after the transfer was made or the obligation was incurred * * *.” Therefore, the

fact that the debt may have arisen after the fraudulent transfer is not a basis for

dismissing the claims at the pleading state of the proceedings.

{¶24} Thus, even if the motion to quash could have been construed in any

way as a motion for judgment on the pleadings, it should have been denied based on

Appellant's own reference to facts outside the pleadings, the lack of any legal theory

why judgment on the pleadings should have been granted, and Appellant’s incorrect

legal theory regarding the filing of the alleged fraudulent transfer. Appellant's first

assignment of error is overruled. -8-

ASSIGNMENT OF ERROR NO. 2

THE TRIAL COURT ABUSED ITS DISCRETION IN GRANTING THE

DEFAULT JUDGMENT IN FAVOR OF PLAINTIFF-APPELLEE AS A

DISCOVERY SANCTION.

{¶25} Appellant believes that the granting of default judgment in this case was

an abuse of discretion by the trial court. Appellant contends that its counsel was

seriously ill, and that a court abuses its discretion in dismissing a case due to the

illness of the party's counsel. Appellant argues that default judgment as a discovery

sanction is only available when the party's failure to comply with discovery is due to

willfulness, bad faith, or any fault of the party.

{¶26} Appellant is correct that even though dismissal is permitted as a

sanction under Civ.R. 37, it is a harsh sanction that should only be granted as a last

resort. We have held that:

One of the possible sanctions for discovery violations is dismissal of the

lawsuit. Civ.R. 37(B)(2)(c). Dismissal is a drastic sanction that should

be imposed only as a last resort. Furcello v. Klammer (1980), 67 Ohio

App.2d 156, 159, 21 O.O.3d 454, 426 N.E.2d 187. It is an abuse of

discretion to dismiss a case due to discovery violations unless there

has been a showing of willfulness, bad faith, or fault. Toney v.

Berkemer (1983), 6 Ohio St.3d 455, 458, 453 N.E.2d 700; Societe

Internationale v. Rogers (1958), 357 U.S. 197, 212, 78 S.Ct. 1087, 2

L.Ed.2d 1255. -9-

Monigold v. Gossman, 7th Dist. No. 07 CO 41, 2008-Ohio-6213, ¶26.

{¶27} In this case, though, the willfulness, bad faith, and fault of both counsel

and client are apparent from the record. Counsel claims that she was ill starting in

November of 2009, even though the intransigence regarding discovery began

months earlier. Carter-Jones Lumber's notice of discovery was filed on August 25,

2009. Appellant failed to respond. Carter-Jones Lumber filed a notice of deposition

on September 14, 2009. Counsel filed no objection or even response to any aspect

of discovery within the required 28 days. See Civ.R. 33(A)(3), 34(B)(1), and 36(A)(1).

Counsel was apparently well enough to file the motion to quash discovery on October

2, 2009. No mention of any illness appears on or before this date. Carter-Jones

Lumber filed a motion to compel discovery on October 28, 2010, prior to the time

counsel claims to have become ill, but counsel filed no response to the motion. It

was not until many months after the trial court ruled in favor of Carter-Jones Lumber

on each of its motions that counsel was finally inclined to report to the court that she

had been previously ill. This claim simply does not explain the numerous failures to

respond to the various motions and orders in this case related to discovery.

{¶28} It is apparent from the record that Appellant and its counsel were at

odds with one another, that Appellant had not paid for counsel's services, and that

counsel wanted to withdraw based on her inability to get along with Appellant.

Counsel's belated claim to have taken ill only partially explains counsel's failure to

respond to discovery requests and discovery orders in this case. This record

certainly does not indicate any abuse of discretion or reversible error in granting -10-

default judgment when reports of counsel's illness only arose long after many of the

discovery violations had already taken place. Appellant's second assignment of error

is overruled.

{¶29} There is no reversible error indicated in this appeal. The trial court

construed Appellant’s motion filed on October 2, 2009, as a motion to quash

discovery based on both the heading and the content of the motion, and the court

was not required to construe it as a motion for judgment on the pleadings. Even if

the motion could have been interpreted as a Civ.R. 12(C) motion for judgment on the

pleadings, it was properly denied. Finally, the trial court acted within its discretion in

granting default judgment to Carter-Jones Lumber as a discovery sanction against

Appellant when Appellant and its counsel appear to have committed the discovery

violations willfully and with fault, based on this record. Although counsel may have

been seriously ill during part of the litigation, the timing of the illness does not explain

the discovery violations. The judgment of the trial court is affirmed.

Donofrio, J., concurs.

Vukovich, J., concurs.