Cooperider v. OK Cafe & Catering, Inc.

2009 Ohio 6715

• Court: Ohio Court of Appeals
• Decided: December 21, 2009
• Docket: 9-09-28
• Status: Published

Opinion

[Cite as Cooperider v. OK Cafe & Catering, Inc., 2009-Ohio-6715.]

IN THE COURT OF APPEALS OF OHIO THIRD APPELLATE DISTRICT MARION COUNTY

TRACEY A. COOPERIDER, CASE NO. 9-09-28

PLAINTIFF-APPELLEE,

v.

OK CAFE & CATERING, INC. OPINION

DEFENDANT-APPELLANT.

Appeal from Marion County Common Pleas Court Trial Court No. 08CV0862

Judgment Affirmed

Date of Decision: December 21, 2009

APPEARANCES:

Scott E. Williams for Appellant

Jeffrey J. Ratliff for Appellee Case No. 9-09-28

PRESTON, P.J.

{¶1} Defendant-appellant, OK Café & Catering, Inc. (hereinafter “OK

Café), appeals the Marion County Court of Common Pleas’ judgment, which

denied its motion to set aside the default judgment awarded to plaintiff-appellee,

Tracey A. Cooperider (hereinafter “Cooperider”). For the reasons that follow, we

affirm.

{¶2} On October 14, 2008, Cooperider filed a complaint in the Marion

County Common Pleas Court against OK Café alleging that he had suffered

damages from a fall that had occurred on OK Café’s premises. The complaint and

summons were delivered to OK Café via certified mail. An employee of OK Café

signed the certified mail receipt; however, OK Café failed to file an answer, and

on December 4, 2008, Cooperider filed a motion for default judgment on the issue

of liability, which was granted on December 8, 2008. After receiving notice of the

date of the damages hearing, on March 6, 2009, OK Café filed its motion to set

aside the default judgment. Attached to its motion were affidavits from Karen

Gillespie (hereinafter “Karen”), an owner of OK Café, and Ryan Gillespie

(hereinafter “Ryan”), an employee and the daughter of OK Café’s owner, Karen.

In her affidavit, Ryan acknowledged that the signature on the receipt was her

signature. (Ryan Aff. ¶2). And while she stated that, per Karen’s instructions, it

was her routine to place mail she received in Karen’s mailbox or in her office,

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Ryan could not remember receiving this particular letter nor did she know why

Karen never received the letter. (Id. at ¶¶2-3). In addition, Karen testified in her

affidavit that the business had a procedure in place for mail received by an

employee: the employee was to place the mail in Karen’s personal mailbox or on

her desk in her office. (Karen Aff. ¶3). However, in this particular instance,

Karen said that Ryan never told her about the certified letter, and she has no

knowledge of what happened to the letter after Ryan signed for it. (Id. at ¶2, 4).

Furthermore, Karen stated that the letter and its contents had still not been found,

even though she conducted a search for it. (Id. at ¶4). She could only assume that

it was accidentally thrown away or misfiled. (Id.).

{¶3} After a review of the evidence, on March 31, 2009, the trial court

overruled OK Café’s motion to set aside the default judgment finding that OK

Café had failed to demonstrate excusable neglect. The trial court specifically

stated:

Upon consideration of all of the above, this Court finds the fact situation in this case to most closely track the fact situation of LaKing Trucking vs. Coastal Tank Lines, Inc. Neither the affidavit of Ryan Gillespie nor Karen Gillespie, explain precisely what happened to the summons documents after the documents were signed for by Ryan Gillespie. Ryan Gillespie does not state that she lost the documents. The best that can surmised, according to the affidavits, is that the certified mail letter and documents were accidentally thrown away or misfiled.

As the Plaintiff points out in his Memorandum Contra, there is no allegation that any employees of the Defendant failed to

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follow the established procedure for handling certified mail letters.

After reviewing all the materials supplied by the Defendant in support of its Motion to Vacate, all the Court is left with is an unexplained disappearance of the summons after its receipt by the Defendant. As the Third District Court of Appeals has held that the unexplained disappearance of a summons after its receipt by the defendant cannot per se be held excusable neglect, the Court finds that the Defendant in this action has also failed to demonstrate excusable neglect.

(Mar. 31, 2009 JE at 4). Therefore, the trial court ordered that the case proceed to

a damages hearing. OK Café was present and represented at the damages hearing

held on June 29, 2009, after which time, on July 7, 2009, the trial court awarded

Cooperider one hundred and thirty thousand dollars ($130,000) in damages.

{¶4} OK Café now appeals and raises one assignment of error.

ASSIGNMENT OF ERROR

THE TRIAL COURT ERRED IN DENYING DEFENDANT/APPELLANT’S MOTION TO SET ASIDE DEFAULT JUDGMENT PURSUANT TO CIV.R. 60(B)(1) FINDING THAT THE APPELLANT FAILED TO DEMONSTRATE EXCUSABLE NEGLECT WHEN APPELLANT’S MOTION AND ACCOMPANYING AFFIDAVITS CLEARLY SHOWED THAT IT WAS ENTITLED TO RELIEF UNDER LIBERAL CONSTRUCTION OF THE CIVIL RULE AND APPLICABLE CASE LAW. (Trial Court’s Ruling on Motion of Defendant to Set Aside Default Judgment, p. 4).

{¶5} In its assignment of error, OK Café argues that the trial court abused

its discretion in denying its motion to set aside the default judgment entered in

favor of Cooperider when there was evidence of excusable neglect pursuant to

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Civ.R. 60(B)(1) as to why OK Café had failed to file an answer to the complaint.

Cooperider responds by arguing that the trial court did not abuse its discretion

because OK Café had failed to prove that it was entitled to set aside the default

judgment entered against it.

{¶6} The Supreme Court of Ohio has determined that “[a] motion for

relief from judgment under Civ.R. 60(B) is addressed to the sound discretion of

the trial court, and that court’s ruling will not be disturbed on appeal absent a

showing of abuse of discretion.” Griffey v. Rajan (1987), 33 Ohio St.3d 75, 77,

514 N.E.2d 1122. An abuse of discretion constitutes more than an error of law or

judgment and implies that the trial court acted unreasonably, arbitrarily, or

unconscionably. Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219, 450

N.E.2d 1140. When applying the abuse-of-discretion standard, a reviewing court

may not simply substitute its judgment for that of the trial court. Id.

{¶7} Civ. R. 60(B) specifically sets forth the grounds for relief from

judgment and provides as follows:

On motion and upon such terms as are just, the court may relieve a party or his legal representative 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 under Rule 59(B); (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 a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment

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should have prospective application; or (5) any other reason justifying relief from the judgment. The motion shall be made within a reasonable time, and for reasons (1), (2) and (3) not more than one year after the judgment, order or proceeding was entered or taken. A motion under this subdivision (B) does not affect the finality of a judgment or suspend its operation.

In order to prevail on a motion brought pursuant to Civ.R. 60(B), “the 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 the grounds of relief are Civ.R. 60(B)(1), (2), or (3), not more

than one year after the judgment, order or proceeding was entered or taken.” GTE

Automatic Elec., Inc. v. ARC Industries, Inc. (1976), 47 Ohio St.2d 146, 351

N.E.2d 113, at paragraph two of the syllabus. All three elements must be

established, and the test is not met if any one of these requirements is missing.

ABN AMRO Mtge. Group, Inc. v. Jackson, 159 Ohio App.3d 551, 556, 2005-Ohio-

297, 824 N.E.2d 600, ¶11.

{¶8} Here, the parties do not dispute that OK Café has demonstrated two

of the three prongs required under the GTE test, specifically that: OK Café had a

meritorious defense or claim to present if relief was granted, and that the motion

was made within a reasonable time. Rather, what is at issue in this appeal is

whether OK Café demonstrated that its conduct constituted excusable neglect

under Civ.R. 60(B)(1).

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{¶9} The Ohio Supreme Court has defined “excusable neglect” in the

negative by stating that “* * * the inaction of a defendant is not ‘excusable

neglect’ if it can be labeled as a ‘complete disregard for the judicial system.’” Kay

v. Marc Glassman, Inc. (1996), 76 Ohio St.3d 18, 20, 665 N.E.2d 1102. See, also,

D.G.M., Inc. v. Cremeans Concrete & Supply Co., Inc. (1996), 111 Ohio App.3d

134, 675 N.E.2d 1263; Katko v. Modic (1993), 85 Ohio App.3d 834, 621 N.E.2d

809; Amzee Corp. v. Comerica Bank-Midwest (May 21, 2002), 10th Dist. No.

01AP-465, 2002-Ohio-3084. The Court has also stated that Civ.R. 60(B) is a

remedial rule that should be liberally construed, while bearing in mind that Civ.R.

60(B) constitutes an attempt to “strike a proper balance between the conflicting

principles that litigation must be brought to an end and justice should be done.”

Doddridge v. Fitzpatrick (1978), 53 Ohio St.2d 9, 12, 371 N.E.2d 214, quoting 11

Wright & Miller, Federal Practice & Procedure 140, Section 2851. In determining

whether a party’s actions amount to excusable neglect, courts must look to the

facts and circumstances of each case. D.G.M., Inc., 111 Ohio App.3d at 138.

{¶10} Here, OK Café claims that under the facts and circumstances of this

case, OK Café’s conduct did not constitute a complete disregard for the judicial

system and amounted to excusable neglect. It had a procedure in place to handle

the receipt of mail by its employees: mail was to be placed in Karen’s mailbox or

on her office desk. In addition, even though the employee signed the receipt, she

had no recollection of receiving the letter, and no one knows what happened to

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this letter after it was signed. Moreover, OK Café took immediate steps to

respond to the complaint when it eventually did become aware of the lawsuit

(when it received notice of the damages hearing). In support of its argument, OK

Café cites to the following cases, which it claims are factually similar to its case:

Hopkins v. Quality Chevrolet, Inc. (1992), 79 Ohio App.3d 578, 582, 607 N.E.2d

914 (“relief from default judgment may be granted on the basis of excusable

neglect when service is properly made on a corporation but a corporate employee

fails to forward the summons and complaint to the appropriate person”); Perry v.

General Motors Corp. (1996), 113 Ohio App.3d 318, 324, 680 N.E.2d 1069 (relief

under Civ.R. 60(B)(1) available where defendant supported motion for relief with

affidavits indicating complaint and summons were inadvertently sent to wrong

department and misplaced, and, therefore, never received by appropriate person in

corporate hierarchy); Enhanced Systems, Inc. v. CBM Computer Center (July 20,

1989), 8th Dist. No. 56978, at *2-3 (holding that there were proper grounds for

excusable neglect when corporation’s general counsel did not receive a copy of

plaintiff’s complaint because it was misplaced in transit from another corporate

employee); Sycamore Messenger, Inc. v. Cattle Barons, Inc. (1986), 31 Ohio

App.3d 196, 196-97, 509 N.E.2d 977 (holding a corporation’s motion for relief

from a default judgment may be granted on the basis of excusable neglect, where

service is properly made, but the corporation’s bookkeeper fails to forward the

summons and complaint to the appropriate person). After a review of the record

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and the relevant case law, we do not believe that the trial court abused its

discretion in denying OK Café’s motion for relief.

{¶11} A defendant may still obtain relief from a default judgment on the

basis of excusable neglect when service is properly made on the corporation but a

corporate employee fails to forward the complaint to the appropriate person.

Linquist v. Allstate Ins. Co., 5th Dist. No. 2006CA00391, 2007-Ohio-4587, ¶20,

citing Hopkins v. Quality Chevrolet, Inc. (1992), 72 Ohio App.3d 578, 607 N.E.2d

914. However, in order to obtain relief under those factual circumstances, “the

corporation must provide sworn affidavits or evidence to support the claim that

excusable neglect was the basis for the failure to answer.” Id., citing Hopkins, 72

Ohio App.3d at 583. These affidavits are sufficient if they establish the following:

“(1) that there is a set procedure to be followed in the corporate hierarchy for

dealing with legal process, and (2) that such procedure was, inadvertently, not

followed until such time as a default judgment had already been entered against

the corporate defendant.” Id., citing Hopkins, 72 Ohio App. 3d at 583, Woodside

Pet Cemetery, Inc. v. W.G. Lockhart Const. Co. (Oct. 26, 1998), 5th Dist. No.

1997CA00402.

{¶12} While there is evidence in the affidavits that OK Café had an

established procedure dealing with legal process, there was no evidence that such

procedure was not followed. No one could remember what happened to the

complaint and summons: Ryan could not remember what happened after she

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signed the receipt because she did not remember even receiving the letter; and

Karen could only assume that because she never saw it, the complaint and

summons must have been “thrown away or misfiled.” As this Court has

previously stated, “[t]he unexplained disappearance of the summons after its

receipt by the defendant cannot per se be held ‘excusable neglect.’” LaKing

Trucking, Inc. v. Coastal Tank Lines, Inc. (Feb. 9, 1984), 3d Dist. No. 1-83-3, at

*4. Thus, based on the evidence presented to the trial court, we believe that it was

reasonable for the trial court to find that “all the Court is left with is an

unexplained disappearance of the summons after its receipt by the Defendant,” and

therefore, ultimately deny OK Café’s motion for relief.

{¶13} In addition, we find that all of the cases cited by OK Café can be

distinguished from this particular case. In Hopkins, the affidavit of the

corporation’s president attested that a former employee had failed to forward the

summons and complaint to his supervisor. 79 Ohio App.3d at 582-83. In Perry,

the corporation’s official testified that the complaint was misplaced after an

employee sent it to the payroll department rather than to corporate counsel. 113

Ohio App.3d at 321-24. In Enhanced Systems, Inc., the defendant presented

unrebutted evidence establishing that the corporation’s general counsel never

received a copy of the complaint because it had been misplaced in transit from

another corporate employee. (July 20, 1989), 8th Dist. No. 56978, at *3. Finally,

in Sycamore, the affidavit from an officer of the corporation stated that the

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corporation never received notice because the bookkeeper had failed to forward

the summons and complaint to the appropriate person. 31 Ohio App.3d at 196. In

each of the above cases, there was evidence as to why the complaint and summons

never reached the appropriate person: there was a breakdown in the established

procedure. Here, there was no evidence that OK Café’s procedure was not

followed because the person who signed for the receipt could not even remember

receiving the documents and did not know why the owner never received it.

{¶14} Finally, while we acknowledge that courts should liberally construe

Civ.R. 60(B) when determining whether a party’s conduct constitutes excusable

neglect, here there was no evidence of neglect for the trial court to have liberally

construed since the employee could not remember even receiving the documents.

{¶15} Therefore, based on the evidence in the record, we find that it was

reasonable for the trial court to have denied OK Café’s motion for relief when the

evidence only demonstrated an “unexplained disappearance” of the summons and

complaint.

{¶16} OK Café’s assignment of error is, therefore, overruled.

{¶17} Having found no error prejudicial to the appellant herein in the

particulars assigned and argued, we affirm the judgment of the trial court.

WILLAMOWSKI and SHAW, J.J., concur.

/jnc

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