[Cite as Hanson Aggregates Davon v. J & H Reinforcing & Structural Erectors, Inc., 2014-Ohio-4832.]
IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT SCIOTO COUNTY
HANSON AGGREGATES DAVON, : LLC, : : Plaintiff-Appellant, : Case No. 14CA3608 : vs. : : DECISION AND JUDGMENT J & H REINFORCING AND : ENTRY STRUCTURAL ERECTORS, INC., : et al., : : Defendants-Appellees. : Released: 10/29/14 _____________________________________________________________ APPEARANCES:
Dave Lackey, Scherner & Sybert LLC, Powell, Ohio, for Appellant.
Donald W. Gregory and Timothy A. Kelley, Kegler Brown Hill & Ritter LPA, Columbus, Ohio, for Appellees. _____________________________________________________________
McFarland, J.
{¶1} Appellant, Hanson Aggregates Davon, LLC, appeals the trial
court’s summary judgment decision granted in favor of Appellees, J&H
Reinforcing and Structural Erectors, Inc. and Ohio Farmers Insurance
Company. On appeal, Appellant raises one assignment of error, contending
that the trial court erred when it concluded that reasonable minds could
come to one conclusion, and that conclusion was that Appellant failed to Scioto App. No. 14CA3608 2
properly serve its notice of furnishing upon Appellant, J&H Reinforcing and
Structural Erectors, Inc.
{¶2} Because we conclude that Appellant was required to demonstrate
that Appellee, J&H Reinforcing and Structural Erectors, Inc. (J&H), actually
received the notice of furnishing that was sent via certified mail, but was
unable to provide a written evidence of receipt, and because the evidence
properly considered by the trial court indicated J&H did not actually receive
the notice of furnishing, we find no genuine issue of material fact exists
which precluded summary judgment. As such, Appellant's sole assignment
of error is overruled. Accordingly, the trial court's grant of summary
judgment in favor of Appellees is affirmed.
FACTS
{¶3} This appeal involves the grant of summary judgment in favor of
Appellees, J&H Reinforcing and Structural Erectors, Inc. and Ohio Farmers
Insurance Company, regarding a bond claim made for payment of materials
furnished in the construction of a public improvement project, namely the
construction of Clay Pre K-12 public school. Appellant, Hanson Aggregates
Davon, LLC, filed suit against Appellees, claiming payment had not been
made for material provided to J&H during the construction of the school. Scioto App. No. 14CA3608 3
J&H was the principal contractor and Ohio Farmers issued the bond to
guarantee payment to the subcontractors and other materialmen.
{¶4} During the project, J&H arranged for subcontractor, Kenny
Huston, to perform masonry work. Huston in turn arranged for Appellant,
also a subcontractor, to supply masonry materials. Appellant arranged for
the masonry block to be manufactured by Oberfields, Inc. The record
reflects that Oberfields manufactured the materials and then held the
materials at their yard and Huston would call periodically to arrange to pick
up quantities as needed for the project.
{¶5} At some point, it became apparent that far more block was
ordered than was needed for the project. The record indicates that it was
discovered that there was a significant miscalculation in the masonry block
ordered for the project and that, as a result, nearly twice the amount of block
needed was manufactured by Oberfields. It also appears from the record that
Huston calculated and ordered the block and that Hanson has paid
Oberfields for the block. After Hanson met with Huston to discuss the
problem of the excess block that remained at Oberfields and to determine a
payment plan whereby Huston would pay Hanson approximately $150,000
for the block, Huston abandoned the project and subsequently went into
receivership. Scioto App. No. 14CA3608 4
{¶6} On February 10, 2012, Appellant filed a complaint against
Appellees to recover against the bond that was issued for the public
construction project, claiming there was $184,390.22 due for materials
ordered by Huston. Appellees denied liability under the bond. After the
parties completed discovery and conducted depositions, and after an initial
motion for summary judgment filed by Appellant was denied by the trial
court, Appellees filed a motion for summary judgment on January 10, 2014.
Appellant opposed the motion and also filed a cross motion for partial
summary judgment. On February 19, 2014, the trial court issued an entry
granting summary judgment in favor of Appellees based upon its
determination that Appellant was unable to show that Appellees actually
received a notice of furnishing of the materials at issue, proper service of
which is a prerequisite to asserting a statutory lien for materials. It is from
this decision that Appellant now brings its timely appeal, setting forth a
single assignment of error for our review.
ASSIGNMENT OF ERROR
“I. THE TRIAL COURT ERRED IN ITS ENTRY WHEN IT CONCLUDED THAT REASONABLE MINDS COULD COME TO ONE CONCLUSION, AND THAT CONCLUSION WAS THAT HANSON AGGREGATES DAVON, LLC FAILED TO PROPERLY SERVE ITS NOTICE OF FURNISHING UPON J & H REINFORCING AND STRUCTURAL ERECTORS, INC.” Scioto App. No. 14CA3608 5
LEGAL ANALYSIS
{¶7} In its sole assignment of error, Appellant essentially contends
that the trial court erred in granting summary judgment in favor of
Appellees. More specifically, Appellant contends that the trial court erred in
concluding that no genuine issue of material fact existed with respect to the
question of whether or not Appellant properly served a notice of furnishing
upon Appellees in accordance with R.C. 1311.261 and 1311.19. Appellant
raises two issues under his sole assignment of error. First, Appellant
questions whether service of the notice of furnishing was complete when it
was mailed by certified mail, pursuant to R.C. 1311.19, such that actual
evidence of receipt by J&H was unnecessary. Secondly, Appellant
questions whether genuine issues of material fact exist with respect to the
service of the notice of furnishing which should have precluded summary
judgment.
{¶8} When reviewing a trial court's decision on a motion for summary
judgment, we conduct a de novo review governed by the standard set forth
in Civ.R. 56. Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833
N.E.2d 712, ¶ 8. Summary judgment is appropriate when the movant has
established (1) that there is no genuine issue of material fact, (2) that
reasonable minds can come to but one conclusion, and that conclusion is Scioto App. No. 14CA3608 6
adverse to the nonmoving party, with the evidence against that party being
construed most strongly in its favor, and (3) that the moving party is entitled
to judgment as a matter of law. Bostic v. Connor, 37 Ohio St.3d 144, 146,
524 N.E.2d 881 (1988); citing Harless v. Willis Day Warehousing Co., 54
Ohio St.2d 64, 66, 375 N.E.2d 46 (1978); See also, Civ.R. 56(C).
{¶9} The burden of showing that no genuine issue of material fact
exists falls upon the party who moves for summary judgment. Dresher v.
Burt, 75 Ohio St.3d 280, 294, 75 Ohio St.3d 280, 662 N.E.2d 264 (1996).
To meet its burden, the moving party must specifically refer to “the
pleadings, depositions, answers to interrogatories, written admissions,
affidavits, transcripts of evidence, and written stipulations of fact, if any,
timely filed in the action,” that affirmatively demonstrate that the
nonmoving party has no evidence to support the nonmoving party's claims.
Civ.R. 56(C); See also Hansen v. Wal–Mart Stores, Inc., 4th. Dist Ross No.
07CA2990, 2008-Ohio-2477, ¶ 8. Once the movant supports the motion
with appropriate evidentiary materials, the nonmoving party “may not rest
upon the mere allegations or denials of the party's pleadings, but the party's
response, by affidavit or as otherwise provided in this rule, must set forth
specific facts showing that there is a genuine issue for trial.” Civ.R. 56(E). Scioto App. No. 14CA3608 7
“If the party does not so respond, summary judgment, if appropriate, shall be
entered against the party.” Id.
{¶10} Appellant claims that it was not required to prove that J&H
actually received its notice of furnishing since it sent the notice by certified
mail. Appellant further argues that because it followed the “statutorily-
preferred” method of service of its notice of furnishing by sending it
certified mail, return receipt requested, and because it was not returned as
undelivered, unclaimed or refused, that service was complete upon mailing
an no inquiry into whether J&H actually received it is necessary. For the
following reasons, we disagree with Appellant's argument.
{¶11} R.C. 153.56 provides, in pertinent part, as follows:
“(A) Any person to whom any money is due for labor or work
performed or materials furnished in a public improvement as
provided in section 153.54 of the Revised Code, at any time
after performing the labor or work or furnishing the materials,
but not later than ninety days after the completion of the
contract by the principal contractor and the acceptance of the
public improvement * * * shall furnish the sureties on the bond,
a statement of the amount due to the person. Scioto App. No. 14CA3608 8
(B) A suit shall not be brought against sureties on the bond until
after sixty days after the furnishing of the statement described
in Division (A) of this section. * * *
(C) To exercise rights under this section, a subcontractor or
materials supplier supplying labor or materials that cost more
than thirty thousand dollars, who is not in direct privity of
contract with the principal contractor for the public
improvement, shall serve a notice of furnishing upon the
principal contractor in the form provided in section 1311.261 of
the Revised Code.” (Emphasis added.)
R.C. 1311.261 addresses requirements and the form to be used for the notice
of furnishing when the materials have been provided for public improvement
projects. R.C. 1311.05 provides similar information regarding mechanics
liens for private construction projects.
{¶12} R.C. 1311.19 details the service requirements applicable to
notices of furnishing as well as other documents required to be served under
Chapter 13 of the Revised Code and provides, in pertinent part, as follows:
“(A) Except as otherwise provided in section 1311.11 of the
Revised Code and division (C) of this section, any notice, Scioto App. No. 14CA3608 9
affidavit, or other document required to be served under this
chapter shall be served by one of the following means:
***
(2) Certified or registered mail, overnight delivery service, hand
delivery, or any other method which includes a written evidence
of receipt[.]" (Emphasis added).
R.C. 1311.19 further provides in section (B) as follows:
"(B) For purposes of this chapter, service is complete upon
receipt by the party being served except as provided in division
(H) of section 1701.07 of the Revised Code and except, for the
purposes of sections 1311.05 and 1311.261 of the Revised
Code, if service of a notice of furnishing is made by certified
mail, service is complete on the date of the mailing. If the
service is attempted upon an owner, part owner, or lessee, or
designee, at the address contained in the notice of
commencement required by section 1311.04 of the Revised
Code, and if the notice, affidavit, or other document is returned
unclaimed or refused, service is complete when first
attempted." (Emphasis added). Scioto App. No. 14CA3608 10
{¶13} Appellant argues that based upon a plain reading of the statute,
because it sent the notice of furnishing by certified mail, service was
complete upon mailing and thus it was unnecessary to demonstrate J&H's
actual receipt of the notice of furnishing. Appellant primarily relies upon the
reasoning set forth in VP Consolidated Holdings, Inc. v. Hunt, et al., 6th.
Dist. Erie No. E-08-025, 2009-Ohio-1129, in support of its argument. In VP
Consolidated Holdings, the court did, in fact, hold that "when a notice of
furnishing for either a private or public improvement is sent by certified
mail, service is considered complete on the date of mailing." Id. at ¶ 17.
VP, however, is factually distinguishable from the case sub judice in that the
principal contractor did not claim that it never received the notice, but rather
the issue seemed to involve the timeliness of the receipt of the notice.
{¶14} Appellant argues in the alternative that if it was required to
show actual receipt on the part of J&H, genuine issues of material fact exist
regarding service of the notice of furnishing. More specifically, Appellant
argues that because the notice was not returned as undelivered, refused or
unclaimed, it is entitled to an inference that the notice of furnishing was
received by J&H. In support of its argument, Appellant cites the “mailbox
rule” which is incorporated into R.C. 1311.19(B). Scioto App. No. 14CA3608 11
{¶15} As set forth above, R.C. 1311.19(B) provides as follows, in
pertinent part:
"For purposes of this chapter, service is complete upon receipt
by the party being served * * *, for the purposes of sections
1311.05 and 1311.261 of the Revised Code, if service of a
notice of furnishing is made by certified mail, service is
complete on the date of the mailing."
Under the “mailbox rule,” there is a rebuttable presumption that a letter
mailed to the correct address is presumed to be received in due course.
Cantrell v. Celotex Corp., 105 Ohio App.3d 90, 94, 663 N.E.2d 708 (1st
Dist.1995).
{¶16} However, we find a different provision contained in R.C.
1311.19 to be more applicable to the facts presently before us. Specifically,
section (C) of R.C. 1311.19, provides as follows:
"A notice, affidavit, or other document to which this division
applies is presumed to have been received three days after the
date of the mailing of the notice, affidavit, or other document,
unless a written acknowledgment, receipt, or other evidence
provides proof to the contrary." (Emphasis added). Scioto App. No. 14CA3608 12
Thus, although section (B) does seem to incorporate the mailbox rule, the
mailbox rule creates a rebuttable presumption of actual delivery. As argued
by Appellant, similar to the mailbox rule, R.C. 1311.19(C) contains an
exception to the automatic presumption of receipt after three days where
"other evidence provides proof to the contrary."
{¶17} In this case, Appellees filed an affidavit in support of their
motion for summary judgment averring that J&H did not actually receive a
notice of furnishing from Appellant. As discussed in more detail below, the
affidavit constituted proper evidence in support of Appellees' motion for
summary judgment. As a result, we find the exception contained in R.C.
1311.19(C) to be applicable and as such any presumption of receipt due to
the fact that the notice was sent via certified mail is rebutted.
{¶18} We are further persuaded that this is the correct result by
Appellees’ argument that "the provisions of R.C. 1311.19(A)(2) requiring
written proof of receipt would be rendered superfluous and meaningless[]"
if Appellant's proposition that it is 'not required to prove that J&H actually
received its notice of furnishing since it sent service via certified mail' were
accepted." As urged by Appellant itself, a court interpreting a statute must
look to the language of the statute to determine legislative intent. State v.
Osborne, 4th Dist. Jackson No. 05 CA2, 2005-Ohio-6610, ¶ 18. Courts Scioto App. No. 14CA3608 13
should give effect to the words of the statute and should not modify an
unambiguous statute by deleting or inserting words; that is, we have no
authority to ignore the plain and unambiguous language of a statute under
the guise of statutory interpretation. State v. McDonald, 4th Dist. Ross No.
04CA2806, 2005-Ohio-3503, ¶ 11. The statute clearly contemplates that
mailing a document by certified mail will provide written evidence of
receipt. Thus, we cannot conclude that requiring Appellant to provide
written evidence of receipt is contrary to a plain reading of the statute, when
actual receipt is disputed by Appellees.
{¶19} Appellant further contends that J&H never actually
demonstrated failure of service in that its only evidence came from Mark
Rollins, a project manager employed by J&H towards the end of the
construction project. Appellant challenges Rollins’ actual knowledge of
whether or not the notice of furnishing was received just by looking at the
project file and concluding it did not contain a notice of furnishing. Thus,
Appellant challenges the trial court’s reliance upon the affidavit of Rollins in
support of Appellees’ motion for summary judgment, claiming it was not
based upon personal knowledge.
{¶20} When deciding a motion for summary judgment, a court may
only consider affidavits that are based upon personal knowledge of the Scioto App. No. 14CA3608 14
affiant. Appellant argues that the information contained within Rollins’
affidavit was not within his personal knowledge. A review of the record
calls into question whether Appellant clearly raised this issue at the trial
court level. Although Appellant mentioned this position in the summary
judgment filings, Appellant never filed a formal motion to strike the
affidavit or made clear its position that the trial court should not consider it.
However, even if Appellant failed to adequately object to the affidavit
below, we must nevertheless be mindful of the language of Civ.R. 56(E) set
forth above which states “ * * * summary judgment, if appropriate, shall be
entered against the party.” (Emphasis added). Thus, summary judgment
should only be granted when appropriate, under Civ.R. 56. As such, we will
review the issue raised by Appellant.
{¶21} “For evidentiary material attached to a summary judgment
motion to be considered, the evidence must be admissible at trial.” See
Civ.R. 56(E) and Pennisten v. Noel, 4th. Dist. Pike No. 01CA669, 2002 WL
254021, *2. Although we conduct a de novo review of the trial court's
decision to grant summary judgment, we review the court's rulings on the
admissibility of evidence for an abuse of discretion. Lawson v. Y.D. Song,
M.D., Inc., 4th. Dist. Scioto No. 97 CA 2480, 1997 WL 596293, *3 (Sept.
23, 1997); See also, State v. Sage, 31 Ohio St.3d 173, 510 N.E.2d 343, at Scioto App. No. 14CA3608 15
paragraph two of the syllabus (1987). The term “abuse of discretion”
implies that the court's attitude is unreasonable, arbitrary, or unconscionable.
State v. Adams, 62 Ohio St.2d 151, 157, 404 N.E.2d 144 (1980). When
applying the abuse-of-discretion standard, a reviewing court may not
substitute its judgment for that of the trial court. Berk v. Matthews, 53 Ohio
St.3d 161, 169, 559 N.E.2d 1301 (1990).
{¶22} Civ.R. 56(E) states: “Supporting and opposing affidavits shall
be made on personal knowledge, shall set forth such facts as would be
admissible in evidence, and shall show affirmatively that the affiant is
competent to testify to the matters stated in the affidavit.” “Personal
knowledge” is “ ‘[k]nowledge gained through firsthand observation or
experience, as distinguished from a belief based on what someone else has
said.’ " Bonacorsi v. Wheeling & Lake Erie Ry. Co., 95 Ohio St.3d 314,
2002-Ohio-2220, 767 N.E.2d 707, ¶ 26; quoting Black's Law Dictionary (7th
Ed.Rev.1999) 875. It is “ ‘knowledge of factual truth which does not
depend on outside information or hearsay.’ ” Residential Funding Co.,
L.L.C. v. Thorne, Lucas App. No. L-09-1324, 2010-Ohio-4271, ¶ 64;
quoting Modon v. Cleveland, 9th. Dist. Medina No. 2945-M, 1999 WL
1260318, *2 (Dec. 22, 1999) . Scioto App. No. 14CA3608 16
{¶23} Rollins’ affidavit specifically stated that his averments were
based upon his personal knowledge, as a Division Manager and Project
Manager for J&H, and his review of documents kept in the ordinary course
of business. Rollins further averred as follows:
“Upon a reasonably-diligent investigation of J&H’s records and
files kept in the court of ordinary business, J&H did not receive
a copy of the Notice of Furnishing dated December 9, 2010,
attached to Hanson’s Complaint as Exhibit E and to Hanson’s
Motion for Summary Judgment as Exhibit H.”
Importantly, there was nothing in Appellant’s memorandum opposing
summary judgment or Appellant’s motion for partial summary judgment,
with the exception of the affidavit of Dequila Blackmon which averred that
“[u]pon information and belief, the notice of furnishing was received by
J&H” that defeated Rollins’ averment of personal knowledge of the lack of a
notice of furnishing in the project records and files kept in the ordinary
course of business by J&H. Despite Blackmon’s averment, we agree with
Appellees that Blackmon had no personal knowledge of whether J&H
actually received the notice of furnishing. Further, in the absence of
Appellant being able to produce written evidence of receipt, and light of the Scioto App. No. 14CA3608 17
Rollins' affidavit stating the notice was not received, such receipt cannot be
inferred.
{¶24} Nonetheless, in some instances, “personal knowledge may be
inferred from the contents of an affidavit * * *.” Carter v. U–Haul Internatl.,
10th. Dist. Franklin No. 09AP-310, 2009-Ohio-5358, ¶ 10; Flagstar Bank
F.S.B. v. Diehl, 5th. Dist. Ashland No. 09COA034, 2010-Ohio-2860, ¶ 25.
Here, Rollins’ averment, based upon his position as a project manager with
J&H sufficiently permits an inference of personal knowledge on his part that
the project files and records kept by J&H did not contain a notice of
furnishing by Appellant. Additionally, as pointed out by Appellees,
although there may have been former J&H employees with more extensive
knowledge about J&H’s normal receipt and filing practices with regard to
notices of furnishing which could have either defeated Appellees’ motion for
summary judgment or better supported Appellant’s partial motion for
summary judgment, Appellant did not subpoena those individuals for
depositions.
{¶25} Coupled with Rollins’ deposition testimony that the normal
practice at J&H is for the accounting person to put notices of furnishing in
the project file when received, we believe that the trial court properly
considered Rollins’ affidavit as evidence that J&H did not receive the notice Scioto App. No. 14CA3608 18
of furnishing. Thus, we conclude that Appellees’ affidavit filed in support
of its motion for summary judgment complies with Civ.R. 56(E). As such,
the trial court did not err or abuse its discretion in relying on the affidavit in
reaching its decision to grant summary judgment in favor of Appellees.
{¶26} In light of our determination that R.C. 1311.19 does require
proof of receipt of the notice of furnishing on the part of the principal
contractor by virtue of the language contained in section (A)(2) which
specifies “written evidence of receipt,” and because Appellant offered no
evidence to overcome the affidavit of Mark Rollins, which was properly
considered by the trial court, we find no merit in the issues and arguments
raised by Appellant in support of its sole assignment of error. Further, even
construing the evidence in a light most favorable to Appellant, we find no
genuine issues of material fact exist which should have precluded summary
judgment in favor of Appellees.
{¶27} As set forth above, the proper service of a notice of furnishing
is a prerequisite to being able to assert a statutory lien claim. Construing the
evidence in a light most favorable to Appellant, Appellant was unable to
demonstrate proof of receipt by Appellees. Although R.C. 1311.19(B) does
state that service is complete upon mailing when a notice is sent via certified
mail, R.C. 1311.19(A)(2) contemplates that written evidence of receipt will Scioto App. No. 14CA3608 19
be able to be provided. Appellant could not provide that. Further, as stated
above, R.C. 1311.19(C) provides that a notice is presumed to have been
received three days after the date of the mailing “unless a written
acknowledgment, receipt, or other evidence provides proof to the contrary.”
Here, there was “proof to the contrary” in the form of the Rollins’ affidavit,
as well the fact that Appellant could provide no proof of receipt.
Accordingly, Appellant’s sole assignment of error is overruled and the
decision of the trial court is affirmed.
JUDGMENT AFFIRMED. Scioto App. No. 14CA3608 20
JUDGMENT ENTRY
It is ordered that the JUDGMENT BE AFFIRMED and that the Appellees recover of Appellant any costs herein.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Scioto County Common Pleas Court to carry this judgment into execution.
Any stay previously granted by this Court is hereby terminated as of the date of this entry.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
Hoover, J.: Concurs in Judgment and Opinion. Harsha, J.: Concurs in Judgment Only.
For the Court,
BY: _____________________________ Matthew W. McFarland, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment entry and the time period for further appeal commences from the date of filing with the clerk.