Fifth Third Bank v. Schoessler's Supply Room, L.L.C.

940 N.E.2d 608, 190 Ohio App. 3d 1
CourtOhio Court of Appeals
DecidedAugust 30, 2010
DocketNo. CA2009-11-153
StatusPublished
Cited by4 cases

This text of 940 N.E.2d 608 (Fifth Third Bank v. Schoessler's Supply Room, L.L.C.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fifth Third Bank v. Schoessler's Supply Room, L.L.C., 940 N.E.2d 608, 190 Ohio App. 3d 1 (Ohio Ct. App. 2010).

Opinion

Powell, Judge.

{¶ 1} Defendant-appellant, Schoessler’s Supply Room, L.L.C. (“SSR”), appeals the Warren County Court of Common Pleas decision denying SSR relief from both a cognovit judgment and a default judgment in favor of plaintiff-appellee, Fifth Third Bank.

{¶ 2} On January 13, 2006, SSR executed two Small Business Administration notes and a security agreement in favor of Fifth Third. The first note (Note 42) represented a $125,000 revolving line of credit. Note 42 was due and payable on January 13, 2007, although it contained a discretional annual renewal provision. The second note (Note 26) was a $33,000 term note due and payable after five years, with monthly principal and interest payments. Both included acceleration provisions should SSR default on either note, and both contained provisions with a warrant of attorney authorizing a cognovit judgment. In addition, Charles Joseph Ducastel Jr., owner and managing member of SSR, executed two unconditional guarantees in favor of Fifth Third, personally obligating himself on the payment of Notes 42 and 26.

{¶ 3} On July 21, 2009, Fifth Third filed its complaint against SSR upon the cognovit notes and security agreements. Also, pursuant to the warrant-of-attorney provision in Notes 42 and 26, Robert D. Ross, counsel for Fifth Third, entered an appearance on behalf of SSR and confessed judgment on the notes. The trial court entered judgment in favor of Fifth Third on Notes 42 and 26. Copies of all the filings were sent to SSR and to its registered agent via certified mail, return receipt requested.

[4]*4{¶ 4} Proceeding pro se, Ducastel unsuccessfully sought to set aside the judgment arguing that he had not consented to representation by Ross in the instant matter. The trial court denied Ducastel’s request and subsequently granted Fifth Third’s motion for a default judgment on the remaining counts in the complaint, giving Fifth Third possession of SSR’s collateral and granting the bank’s request for attorney fees.

{¶ 5} On September 14, 2009, SSR moved for relief from both the cognovit and default judgments under Civ.R. 60(B), supported by an affidavit from Ducastel. SSR argued that it was entitled to, among other things, relief pursuant to the Servicemember’s Civil Relief Act (“SCRA”) codified at Section 501 et seq., Title 50 Appendix, U.S.Code; failure of service of process; fraud; mistake; and failure to join a necessary party. The trial court overruled SSR’s motion, finding only that it was “not well taken,” with no further reasoning to support its decision. SSR filed an appeal raising two assignments of error.

{¶ 6} Assignment of Error No. 1:

{¶ 7} “The trial court erred in issuing its entry overruling the motion to vacate.”

{¶ 8} In its first assignment of error, SSR argues that the trial court abused its discretion in failing to grant its Civ.R. 60(B) motion for relief from both the cognovit and default judgments. We agree.

{¶ 9} Ordinarily to prevail upon a motion for relief from judgment pursuant to Civ.R. 60(B), a movant must demonstrate “(1) the existence of a meritorious defense or claim, (2) entitlement to relief under one of the grounds set forth in the rule, and (3) that the motion is made within a reasonable time.”1 Svoboda v. Brunswick (1983), 6 Ohio St.3d 348, 351, 6 OBR 403, 453 N.E.2d 648, citing GTE Automatic Elec. v. ARC Industries (1976), 47 Ohio St.2d 146, 1 O.O.3d 86, 351 N.E.2d 113, paragraph two of the syllabus. The purpose of Civ.R. 60(B) is to “permit!] relief in the interests of justice,” and therefore “doubt should be resolved in favor of the movant.” Svoboda at 351, 6 OBR 403, 453 N.E.2d 648.

{¶ 10} A reviewing court analyzes a trial court’s decision to deny a motion for relief from judgment under an abuse-of-discretion standard. GTE, 47 Ohio St.2d at 148, 1 O.O.3d 86, 351 N.E.2d 113. However, a reviewing court must also be mindful that “[wjhere timely relief is sought from a * * * judgment and the movant has a meritorious defense, doubt, if any, should be resolved in favor of the motion to set aside the judgment so that cases may be decided on their merits.” Id. at paragraph three of the syllabus.

[5]*5{¶ 11} “Where the judgment sought to be vacated is a cognovit judgment, the test which must be satisfied before a movant is entitled to relief under Civ.R. 60(B) is modified.” Producers Credit Corp. v. Voge, Preble App. No. CA2002-06009, 2003-Ohio-1067, 2003 WL 929257, ¶ 30. See also Natl. City Bank v. Rini, 162 Ohio App.3d 662, 2005-Ohio-4041, 834 N.E.2d 836, ¶ 18. Since the judgment debtor lacks both notice and the opportunity to answer the complaint before a trial court enters judgment on the cognovit note, the movant need only demonstrate that a meritorious defense or claim exists and the motion is timely made. Producers Credit Corp. at ¶ 30; Natl. City Bank at ¶ 18. A movant is therefore not required to show that it is entitled to relief pursuant to one of the specific grounds listed in Civ.R. 60(B). Producers Credit Corp. at ¶ 30; Natl. City Bank at ¶ 18.

{¶ 12} The motion for relief from judgment was filed September 14, 2009, which was nine days after the trial court entered a default judgment against SSR and 54 days after the cognovit judgment was entered against SSR. We find that the motion was filed within a reasonable time as prescribed by Civ.R. 60(B), and further note that Fifth Third concedes that SSR timely filed its motion.

{¶ 13} In order to establish a meritorious defense, a moving party “must present operative facts that demonstrate the existence of a meritorious defense or claim.” Natl. City Bank at ¶ 20. “[T]he movant is not required to prove that [it] will ultimately prevail if relief is granted. Rather, the burden on the moving party is only to allege operative facts which would constitute a meritorious defense [or claim] if found to be true.”2 (Emphasis sic.) Fonts v. Weiss-Carson (1991), 77 Ohio App.3d 563, 565, 602 N.E.2d 1231, citing Colley v. Bazell (1980), 64 Ohio St.2d 243, 247, 18 O.O.3d 442, 416 N.E.2d 605, fn. 3; and Moore v. Emmanuel Family Training Ctr. (1985), 18 Ohio St.3d 64, 67, 18 OBR 96, 479 N.E.2d 879. See also Rose Chevrolet, Inc. v. Adams (1988), 36 Ohio St.3d 17, 20, 520 N.E.2d 564. Therefore, a trial court should grant relief from a cognovit judgment where facts asserted by the moving party, if found to be true, would present a meritorious defense. See Baker Motors, Inc. v. Baker Motors Touring, Inc., 183 Ohio App.3d 223, 2009-Ohio-3294, 916 N.E.2d 853, ¶ 16.

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Bluebook (online)
940 N.E.2d 608, 190 Ohio App. 3d 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fifth-third-bank-v-schoesslers-supply-room-llc-ohioctapp-2010.