Haley v. Nomad Preservation, Inc.

2013 Ohio 86

• Court: Ohio Court of Appeals
• Decided: January 16, 2013
• Docket: 26341
• Status: Published

Opinion

[Cite as Haley v. Nomad Preservation, Inc.,, 2013-Ohio-86.]

STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF SUMMIT )

STEPHEN T. HALEY C.A. No. 26341

Appellant

v. APPEAL FROM JUDGMENT ENTERED IN THE NOMAD PRESERVATION, INC., et al. COURT OF COMMON PLEAS COUNTY OF SUMMIT, OHIO Appellees CASE No. CV 2010-07-4748

DECISION AND JOURNAL ENTRY

Dated: January 16, 2013

BELFANCE, Judge.

{¶1} Appellant Stephen Haley appeals from the order of the Summit County Court of

Common Pleas which, inter alia, quashed the garnishment order and Mr. Haley’s discovery

requests. For the reasons set forth below, we affirm in part and reverse in part.

I.

{¶2} Recitation of much of the procedural history of this matter is unnecessary for

purposes of this appeal. Following an entry of default judgment, on October 29, 2010, Mr.

Haley was awarded $1,311,443.88, plus statutory interest of 4% from the date of judgment

against Defendant Nomad Preservation, Inc. (“Nomad”). Subsequently, on November 15, 2010,

Mr. Haley filed a motion for an order of garnishment of property other than personal earnings

against Bank of American, N.A. – Corporate Accounts Payable. That same day, an affidavit and

order and notice of garnishment was filed pursuant to R.C. 2716.11 and 2716.13. Mr. Haley

averred that Bank of America, N.A. – Corporate Accounts Payable had money, property, or 2

credits, other than personal earnings of Nomad amounting to $960,467.74 in accounts payable

and $127,324.79 in improper chargebacks. It is apparent that Mr. Haley believed that Bank of

America and/or one its subsidiaries or parents owed Nomad money for preservation work

Nomad performed on foreclosed properties pursuant to contracts. The order and notice of

garnishment required that Bank of America, N.A. – Corporate Accounts Payable complete an

answer within five business days after receipt. The record reflects that order and notice of

garnishment was served on Bank of America by Federal Express on November 18, 2010. On

December 2, 2010, Mr. Haley filed a motion seeking an order requiring Bank of America, N.A.

to appear and show cause why it should not be held in contempt for failing to answer. On

December 7, 2010, an entity identified as “Bank of America” filed an answer on the form answer

contained in the notice of garnishment. The form was completed and signed by “Carol West-

Lead Ops Rep” wherein “Bank of America” is identified as the garnishee. In the answer, Bank

of America denied that it had any money, property, or credits exceeding $400 other than personal

earnings of Nomad. On December 8, 2010, the trial court issued an order requiring Bank of

America to appear and show cause on January 12, 2011, pursuant to R.C. 2716.21(E) and explain

why it should not be held in contempt for failure to comply with the order and notice of

garnishment. In addition, Mr. Haley filed a motion to compel the production of documents from

Bank of America. Thereafter, Bank of America, N.A. filed a motion to quash the subpoena

duces tecum and dismiss the garnishment.

{¶3} In January 2011, Mr. Haley and Bank of America, N.A. agreed to withdraw their

mutual motions. However, in December 2011, Mr. Haley re-filed his motions to compel and

show cause against Bank of America, N.A. Likewise, Bank of America, N.A. again requested

that the trial court dismiss the garnishment and quash the subpoena and discovery requests. 3

Briefing on the issues followed, although no hearing was held. Ultimately, the trial court

quashed the garnishment order, concluding that the proceeds Mr. Haley sought were not subject

to the order of garnishment and that Mr. Haley improperly served Bank of America, N.A. The

trial court also granted Bank of America, N.A.’s motion to quash Mr. Haley’s discovery

requests. Mr. Haley has appealed from this order, raising three assignments of error for our

review, which will be addressed out of sequence to facilitate our review.

II.

ASSIGNMENT OF ERROR II

THE TRIAL COURT ERR[ED] AS A MATTER OF LAW BY QUASHING THE GARNISHMENT ORDER HOLDING THAT APPELLANT JUDGMENT- CREDITOR CAUSED THE GARNISHMENT ORDER TO BE SERVED IMPROPERLY UPON GARNISHEE BANK OF AMERICA N.A.

{¶4} Mr. Haley asserts in his second assignment of error that the trial court erred in

quashing the garnishment because Bank of America, N.A. was properly served. We do not

agree.

{¶5} In the trial court, Bank of America, N.A. contested the service of the notice and

order of garnishment because it asserted that the address was not the address used by Bank of

America, N.A. but was instead used by BAC Home Loans Servicing, LP, an entirely different

legal entity. Bank of America, N.A. did not support its assertion with an affidavit, nor was there

a hearing on this issue. Mr. Haley seemed to assert in the trial court that he was serving both

Bank of America, N.A. and Bank of America Corporation because the notice and order of

garnishment specified “Bank of America, N.A. - Corporate Accounts Payable” and, according to

Mr. Haley, “Corporate Accounts Payable” is a department of Bank of America Corporation. We

are uncertain from the record whether Mr. Haley’s assertion is accurate. 4

{¶6} Nonetheless, because service was attempted via Federal Express, we conclude it

was not proper, irrespective of what entity Mr. Haley was attempting to serve.

{¶7} “A judgment creditor may collect the amount of the judgment owed from the

personal property of the debtor other than earnings through a proceeding commenced by the

filing of an affidavit as provided by R.C. 2716.11. A written notice of garnishment is then

delivered to the garnishee pursuant to R.C. 2716.13(B).” Goralsky v. Taylor, 59 Ohio St.3d 197,

197 (1991). R.C. 2716.13(B) states, in part, that,

[u]pon the scheduling of a hearing relative to a proceeding in garnishment of property, other than personal earnings, under division (A) of this section, the clerk of the court immediately shall issue to the garnishee three copies of the order of garnishment of property, other than personal earnings, and of a written notice that the garnishee answer as provided in section 2716.21 of the Revised Code and the garnishee’s fee required by section 2716.12 of the Revised Code. The copies of the order and of the notice shall be served upon the garnishee in the same manner as a summons is served and the clerk shall also mail a copy of the order and notice of garnishment to the garnishee by ordinary or regular mail service. The copies of the order and of the notice shall not be served later than seven days prior to the date on which the hearing is scheduled. The order shall bind the property in excess of four hundred dollars, other than personal earnings, of the judgment debtor in the possession of the garnishee at the time of service.

(Emphasis added.)

{¶8} In the instant matter, Mr. Haley sought to serve the notice and order of

garnishment upon Bank of America, N.A. – Corporate Accounts Payable at an address in Simi

Valley, California via Federal Express. Thus, Mr. Haley was attempting to serve an out-of-state

entity. Civ.R. 4.3(A) indicates that “[s]ervice of process may be made outside of this state, as

provided in this rule, in any action in this state, upon a person who, at the time of service of

process, is a nonresident of this state or is a resident of this state who is absent from this state.”

Former Civ.R. 4.3(B)(1) stated that

[e]videnced by return receipt signed by any person, service of any process shall be by certified or express mail unless otherwise permitted by these rules. The clerk 5

shall place a copy of the process and complaint or other document to be served in an envelope. The clerk shall address the envelope to the person to be served at the address set forth in the caption or at the address set forth in written instructions furnished to the clerk with instructions to forward. The clerk shall affix adequate postage and place the sealed envelope in the United States mail as certified or express mail return receipt requested with instructions to the delivering postal employee to show to whom delivered, date of delivery, and address where delivered.

{¶9} At the time the notice and order of garnishment was served via Federal Express

in 2010, Civ.R. 4.3(B) did not provide for service via Federal Express. See J. Bowers Constr.

Co., Inc. v. Vinez, 9th Dist. No. 25948, 2012-Ohio-1171, ¶ 15-17. Thus, proper service of the

notice and order of garnishment was not completed with respect to the garnishee Bank of

America, N.A. – Corporate Accounts Payable. In light of the foregoing, we conclude that the

trial court did not err in quashing the garnishment based upon lack of service. See Duryee v.

Rogers, 8th Dist. No. 78242, 2001 WL 1382772, *2 (Nov. 8, 2001) (concluding that the trial did

not err in failing to dismiss or strike the garnishment when there was a “rebuttable presumption

of service, the appellant[] fail[ed] to raise this issue in its subsequent motions, and [the appellant

failed] to produce evidence to the contrary)[].” Mr. Haley’s assignment of error is overruled.

ASSIGNMENT OF ERROR I

THE TRIAL COURT ERR[ED] AS A MATTER OF LAW BY QUASHING THE GARNISHMENT ORDER HOLDING THAT APPELLANT JUDGMENT- CREDITOR IMPROPERLY SEEKS PROPERTY THAT IS NOT SUBJECT TO THE NOTICE AND ORDER FOR GARNISHMENT OF PROPERTY OTHER THAN PERSONAL EARNINGS MADE PURSUANT TO [R.C. ]2716.11 ET SEQ.

{¶10} Mr. Haley asserts in his first assignment of error that that the trial court

erroneously concluded that the property at issue was not subject to the notice and order of

garnishment. Given that the trial court also determined that service was improper and that the

notice and order of garnishment was properly quashed on this basis, and given that we have 6

affirmed that portion of the order, it was premature for the trial court to assess the merits of the

garnishment of the subject property. To the extent it did so, its order is reversed.

ASSIGNMENT OF ERROR III

THE TRIAL COURT ABUSED ITS DISCRETION BY DENYING APPELLANT JUDGMENT-CREDITOR ANY AND ALL DISCOVERY MADE PURSUANT TO OHIO CIV.R. 69 IN ORDER TO DETERMINE THE AMOUNTS OWED BY GARNISHEE BANK OF AMERICA[,] N.A. TO JUDGMENT DEBTOR, NOMAD PRESERVATION, INC[.] WHICH WOULD SATISFY THE JUDGMENT AGAINST NOMAD PRESERVATION, INC.[] HELD BY APPELLANT JUDGMENT-CREDITOR.

{¶11} Mr. Haley’s third assignment of error is somewhat difficult to follow. While it is

broadly written, his argument seems to focus on the trial court’s denial of his motion to compel

the production of certain documents from Bank of America, N.A.

{¶12} “Initially, we note that courts have broad discretion over discovery matters.”

(Internal quotations and citation omitted.) P.N. Gilcrest Ltd. Partnership v. Doylestown Family

Practice, Inc., 9th Dist. No. 10CA0035, 2011-Ohio-2990, ¶ 16. In support of its original motion

to quash, relied upon by Bank of America, N.A. in its re-filed motion, Bank of America, N.A.

argued that Mr. Haley failed to comply with the procedure necessary to subpoena documents

from an out-of-state entity. The trial court applied Civ.R. 45(C)(3)(d) in denying Mr. Haley’s

motion and granting Bank of America, N.A.’s motion to quash. Civ.R. 45(C)(3)(d) provides

that, “[o]n timely motion, the court from which the subpoena was issued shall quash or modify

the subpoena, or order appearance or production only under specified conditions, if the subpoena

* * * [s]ubjects a person to undue burden.” In applying this standard, the trial court concluded

that Mr. Haley’s “need for said discovery [wa]s clearly outweighed by the burden imposed upon

Bank of America to answer discovery relating to property that is not subject to the Order of

Garnishment.” It is apparent that the trial court reached its conclusion based upon its 7

determination that the property at issue was not subject to the notice and order of garnishment.

In light of our determination that its finding was premature, we reverse and remand for the trial

court to consider the matter in the first instance.

III.

{¶13} In light of the foregoing, the portions of the order of the Summit County Court of

Common Pleas quashing the notice and order of garnishment are affirmed. To the extent the trial

court addressed the merits of the garnishment proceedings or Mr. Haley’s entitlement to

discovery, its decision is reversed.

Judgment affirmed in part, reversed in part, and cause remanded.

There were reasonable grounds for this appeal.

We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.

Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30. 8

Costs taxed equally to both parties.

EVE V. BELFANCE FOR THE COURT

MOORE, P. J. CARR, J. CONCUR.

APPEARANCES:

STEPHEN T. HALEY, pro se, Appellant.

BROOKE TURNER BAUTISTA and JAMES S. WERTHEIM, Attorneys at Law, for Appellees.