Imani Home Health Care, L.L.C. v. Visionary Group, L.L.C.

2025 Ohio 173

• Court: Ohio Court of Appeals
• Decided: January 23, 2025
• Docket: 114198
• Status: Published

Opinion

[Cite as Imani Home Health Care, L.L.C. v. Visionary Group, L.L.C., 2025-Ohio-173.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

IMANI HOME HEALTH CARE L.L.C., : ET AL., : Plaintiffs-Appellants, : No. 114198 v. : VISIONARY GROUP, L.L.C., : Defendant-Appellee.

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED RELEASED AND JOURNALIZED: January 23, 2025

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-23-974993

Appearances:

Lester S. Potash, for appellants.

Gilbert W.R. Rucker, III, for appellee.

KATHLEEN ANN KEOUGH, P.J.:

This appeal is before the court on the accelerated docket pursuant to

App.R. 11.1 and Loc.App.R. 11.1. The purpose of an accelerated appeal is to allow an

appellate court to render a brief and conclusory decision. State v. Trone, 2020-

Ohio-384, ¶ 1 (8th Dist.), citing State v. Priest, 2014-Ohio-1735, ¶ 1 (8th Dist.). I. Background

Plaintiffs-appellants, Imani Home Health Care, L.L.C. (“Imani”) and

Jennifer Witten (“Witten”) (collectively “appellants”), appeal from the trial court’s

judgment granting the motion of defendant-appellee, Visionary Group, L.L.C.

(“Visionary”) to vacate the trial court’s default judgment against it. Finding no merit

to the appeal, we affirm.

On February 10, 2015, Visionary entered into a written agreement to

purchase all of Imani’s assets. Pursuant to the agreement, Visionary was to assume

responsibility for and settle Imani’s debts, including its tax liabilities, and pay Imani

50 percent of the accounts receivable. On February 9, 2023, appellants filed suit

against Visionary, alleging breach of the agreement and asserting that Visionary’s

breach had forced Witten to become personally liable for and pay obligations that

Visionary had agreed to assume under the agreement.

Upon filing the complaint, appellants instructed the clerk of courts to

serve Visionary’s statutory agent, Holden K. Troutman (“Troutman”), by certified

mail at P.O. Box 20124, Cleveland, OH 44120 and 7449 Bingham Road, Gates Mill,

OH 44040, and Nicole A. Stanich (“Stanich”), Visionary’s sole member, by certified

mail at 2618 North Moreland Boulevard, Cleveland, OH 44120. The clerk

subsequently notified appellants that service to Stanich was “not deliverable as

addressed” and service upon Troutman was “unclaimed” and “not deliverable as

addressed.” Appellants again asked the clerk to serve Troutman at the Bingham

Road and P.O. Box addresses; the clerk subsequently notified appellants that there was “no such post office box number” and the certified mail sent to the Bingham

Road address was “unclaimed” and the “forwarding time [had] expired.”

Appellants then filed in the trial court a “proof of service upon

defendant” pursuant to R.C. 1706.09(H)(2). Attached to the proof of service was a

Notice of Receipt from the Ohio Secretary of State dated April 3, 2023, stating that

pursuant to a request from appellants’ counsel, the secretary of state had served

Stanich by certified mail at the North Moreland Boulevard address and Troutman

at P.O. Box 20124, Cleveland, OH 44120.

Appellants then filed a motion for default judgment against Visionary

for its failure to timely answer the complaint. Appellants served Visionary with

notice of the default hearing via certified mail, return receipt requested, to Troutman

at P.O. Box 20124 and via ordinary mail, also at the P.O. Box address. In his affidavit

filed with the court regarding notice to Visionary of the default hearing, counsel for

appellants averred that he had not received the return receipt nor notice from the

United States Post Office of the failure of delivery of the regular first-class mailing.

Visionary did not appear for the default hearing, and, upon finding

that Visionary had been served but failed to answer or otherwise appear in the

action, the trial court granted appellants’ motion for default judgment. The court

awarded Imani $398,379.11 with interest and costs and Witten $323,379.11 with

interest and costs.

On April 11, 2024, another lawyer entered an appearance for Witten

and advised the court that he had issued a post-judgment subpoena duces tecum to Stanich at 10125 Lake Shore Blvd., Bratenahl, OH 44108, to begin proceedings to

collect the judgment.

On April 22, 2024, counsel for Visionary entered an appearance and

filed a motion to vacate the default judgment pursuant to Civ.R. 60(B). In its

motion, Visionary asserted that the judgment should be vacated because it had not

been served with either the complaint nor appellants’ motion for default judgment

and had only received notice of the action upon Stanich’s receipt of correspondence

from appellants’ new counsel on April 11, 2024. Visionary argued that its motion

was timely, it was entitled to relief from judgment for excusable neglect under

Civ.R. 60(B)(1) and the catchall provision of Civ.R. 60(B)(5), and it had meritorious

defenses to assert against appellants’ claim.

The trial court held a hearing on Visionary’s motion. Stanich testified

at the hearing that she is the sole shareholder of Visionary and that Troutman was

Visionary’s statutory agent in 2015 when Visionary purchased Imani, as well as

when the complaint in this matter was filed. She testified that Troutman was

involved in a very acrimonious divorce proceeding with her mother1 and had added

her as a third-party defendant to the case, such that even if he had received service

of the complaint, “there’s no way in the world he would have ever told me that

something — that Visionary Group or that I personally was being sued.” She said

that she was not familiar with 7449 Bingham, Gates Mills, OH, but that as of the

1 Hunter v. Troutman, Cuyahoga C.P. DR-20-380424; now on appeal to this court

in Hunter v. Troutman, 8th Dist. Cuyahoga No. 113524. filing of the divorce action, Troutman no longer resided at 7449 Brigham, Gates

Mills, OH, which Stanich has owned since 2020.2

Stanich testified further that she does not live at 2618 North

Moreland Boulevard, where appellants attempted to serve her, and does not conduct

any business there. She said that Visionary only got notice of the suit when

appellants’ new counsel sent a letter to her at 10125 Lake Shore Boulevard.,

Bratenahl, OH, a house Stanich owns and where her sister lives. Stanich said that

her sister contacted her upon receipt of the letter and she immediately contacted

counsel.

Upon cross-examination, Stanich agreed that as Visionary’s sole

shareholder, she was responsible for maintaining a current statutory agent address

with the Ohio Secretary of State and that she had not updated the address since

2018, even though she became aware in 2018 that the address on file was not a valid

address. She agreed that Troutman was the statutory agent for Visionary when the

complaint was filed but said she did not know if he was ever made aware of the

lawsuit.

In granting the motion to vacate, the trial court found that there was

not sufficient evidence that appellants ever perfected service on Troutman so that

Visionary received notice of the suit, and there was “some evidence” of excusable

neglect under Civ.R. 60(B)(1) because service was sent to a nonexistent address. The

2 In their appellate brief, appellants concede that the 7449 Bingham address was

not the correct address for service upon Troutman. court also found that “the law requires that I liberally allow parties to proceed on the

merits.” This appeal followed.

II. Law and Analysis

In their single assignment of error, appellants contend that the trial

court erred in granting Visionary’s motion to vacate the default judgment because

Visionary failed to comply with its statutory duty to maintain a valid address for its

statutory agent with the Ohio Secretary of State, as required by R.C. 1706.09(A) and,

therefore, it was not entitled to a finding of excusable neglect under Civ.R. 60(B)(1).

Appellants further contend that service was effective because the Secretary of State

perfected service upon Visionary pursuant to R.C. 1706.09(H)(2).

A default judgment may be rendered against a defendant who has

failed to answer or otherwise defend against allegations raised in a complaint. Ohio

Valley Radiology Assocs., Inc. v. Ohio Valley Hosp.1 Assn., 28 Ohio St.3d 118

(1986). When a defendant fails to answer, default judgment is warranted because

liability has been admitted “by the omission of statements in a pleading refuting the

plaintiff’s claims.” Girard v. Leatherworks Partnership, 2005-Ohio-4779, ¶ 38

(11th Dist.).

However, a judgment rendered without personal jurisdiction over a

defendant is void. Patton v. Diemer, 35 Ohio St.3d 68 (1988), paragraph three of

the syllabus. A court acquires jurisdiction over a party in one of three ways:

(1) proper and effective service of process; (2) voluntary appearance by the party; or

(3) limited acts by the party or his counsel that involuntarily submit the party to the court’s jurisdiction. Austin v. Payne, 107 Ohio App.3d 818, 821 (9th Dist. 1995),

citing Maryhew v. Yova, 11 Ohio St.3d 154, 156 (1984). Therefore, “where the

plaintiff has not perfected service on a defendant and the defendant has not

appeared in the case or otherwise waived service, the court lacks jurisdiction to

render a default judgment against the defendant.” Professional Bank Servs. v.

Abboud, 2015-Ohio-1651, ¶ 12 (8th Dist.), citing Rite Rug Co., Inc. v. Wilson, 106

Ohio App.3d 59, 62 (10th Dist. 1995).

“The authority to vacate a void judgment is not derived from

Civ.R. 60(B) but, rather, constitutes an inherent power possessed by Ohio courts.”

Patton at paragraph four of the syllabus. Thus, the Civ.R. 60(B) requirements are

not applicable when the trial court lacked personal jurisdiction to enter a judgment

because of improper service of process. Kassouf v. Barylak, 2023-Ohio-314, ¶ 20

(8th Dist.); King v. Waters Edge Condo. Unit Owners’ Assn., 2021-Ohio-1717, ¶ 20

(8th Dist.), citing GGNSC Lima, L.L.C. v. LMOP, L.L.C., 2018-Ohio-1298, ¶ 15 (8th

Dist.), citing Patton at id., and Khatib v. Peters, 2017-Ohio-95, ¶ 30 (8th Dist.).

Instead, to vacate the judgment, the party need only establish lack of proper service.

King at id.3

3 Although the appropriate procedure would have been for Visionary to file a

motion to vacate rather than a Civ.R. 60(B) motion for relief from judgment, we do not find the form of the motion fatal to Visionary’s request to vacate the judgment for lack of proper service because a trial court has inherent authority to vacate a void judgment. Kassouf at ¶ 18. In light of the foregoing, it is apparent that we need not consider the

parties’ various arguments regarding whether Visionary did or did not meet the

requirements of Civ.R. 60(B). The issue to be decided is whether effective service of

process was made.

The plaintiff bears the burden of obtaining proper service on a

defendant. Capital One Bank (USA) N.A. v. Smith, 2020-Ohio-1614, ¶ 14 (8th Dist.),

citing Cincinnati Ins. Co. v. Emge, 124 Ohio App.3d 61, 63 (1st Dist. 1997). Where

a plaintiff follows the civil rules governing service of process, courts presume that

service is proper unless the defendant rebuts this presumption with sufficient

evidence of nonservice. Hook v. Collins, 2017-Ohio-976, ¶ 14 (8th Dist.); Lakhodar

v. Madani, 2008-Ohio-6502, ¶ 13 (8th Dist.) (presumption can be rebutted where a

defendant presents sufficient evidentiary-quality information demonstrating that

service was not accomplished).

It is undisputed that appellants’ attempts to serve Visionary through

the clerk of courts’ office were not successful. The public online docket maintained

by the clerk of courts in this case reflects that service on Troutman and Stanich was

not effective and that appellants were advised that the attempts to serve them were

unsuccessful. Specifically, the clerk advised that service to Troutman at the post

office box was unclaimed and, further, that there was no such post office box

number. It also advised that service to Troutman at 7449 Bingham Road in Gates

Mills was unclaimed and the forwarding time had expired. The clerk further advised

that service upon Stanich at the North Moreland Boulevard address was not deliverable as addressed. Appellants obviously recognized that the clerk’s several

attempts at service had failed because after receiving the notices of failed service,

appellants’ counsel filed a request with the Ohio Secretary of State to serve Stanich

and Troutman pursuant to R.C. 1706.09(H)(2).

Pursuant to R.C. 1706.09(A), each limited liability company in Ohio

shall continuously maintain an agent for service of process on the company. Any

legal process on the company may be served by delivering a copy of the process to

the address of the agent contained in the records of the Secretary of State or by

delivering a copy of the process directly to the agent. R.C. 1706.09(H)(1). Under

R.C. 1706.09(H)(2),

[i]f the agent . . . cannot be found or no longer has the address that is stated in the records of the secretary of state . . . and if the party . . . that desires service of the process . . . files with the secretary of state an affidavit that states that one of those circumstances exists and states the most recent address of the company that the party who desires service has been able to ascertain after a diligent search, then the service of the process . . . may be initiated by delivering to the secretary of state four copies of the process . . . accompanied by a fee of five dollars. The secretary of state shall forthwith give notice of that delivery to the company at either its principal place of business as shown upon the secretary of state’s records or at any different address specified in the affidavit of the party desiring service . . . Service upon the company is made when the secretary of state gives the notice and forwards the process . . . as set forth in division (H)(2) of this section.

Appellants contend that as evidenced by the April 3, 2023 Notice of

Receipt from the secretary of state, after receiving appellants’ affidavit, copies of

process, and filing fee, the secretary of state served Stanich by certified mail at 2618

North Moreland Boulevard, Cleveland, OH and Troutman by certified mail at P.O. Box 20124, Cleveland, OH. Accordingly, appellants argue that (1) service was

perfected by the secretary of state pursuant to R.C. 1706.09(H)(2), (2) the trial court

thereby acquired jurisdiction over Visionary, (3) upon Visionary’s failure to answer

or otherwise appear, the trial court properly granted default judgment; and

(4) accordingly, the trial court should not have granted the motion to vacate. We

disagree.

First, the record reflects that the clerk of courts specifically advised

appellants that there is no post office box number 20124, where the secretary of state

allegedly served Troutman. Thus, appellants’ contention that the secretary of state’s

service was valid seems rather disingenuous. Furthermore, although, as appellants

argue, this court has recognized that a defendant’s failure to update its statutory

agent’s address with the secretary of state is generally not a defense to effective

service of process, see Previte v. Piunno, 2010-Ohio-1747 (8th Dist.), that principle

does not apply in this case because appellants were on notice there was no post office

box number 20124 at which to serve Troutman. King, 2021-Ohio-1717, at ¶ 35 (8th

Dist.) (principle announced in Previte did not apply where the plaintiff knew that

service was never perfected).

But even assuming for the sake of argument that Troutman was

served by the secretary of state at a nonexistent post office box number, this court

has recognized “that a statutory agent with an interest antagonistic to the defendant

corporation would render service on the statutory agent ineffectual in conferring

jurisdiction over the corporate defendant ‘even though the statute expressly provides for service on one in such relation.’” Previte at ¶ 19 (8th Dist.), quoting

Walsh v. Commercial Vehicle Motors Co., 28 Ohio Dec. 603 (C.P. Darke 1917); see

also John W. Masury & Son v. Lowther, 299 Mich. 516, 521 (1942) (citing Walsh

and stating, “Even though a person is within the terms of a statute, if his relation to

the plaintiff or the claim in suit is such as to make it to his interest to suppress the

fact of service, such service is unauthorized.”).

The evidence demonstrates that when the complaint was filed and

service was attempted, Troutman was engaged in an acrimonious divorce

proceeding with Stanich’s mother and, in fact, had made Stanich a third-party

defendant to that proceeding. Stanich testified that she did not know whether

Troutman had been served with the complaint but that even if he had, he would not

have told her that Visionary had been sued. Stanich’s testimony is sufficient to

establish that in light of Troutman’s antagonism toward her, and by extension

toward Visionary, any service by the secretary of state on Troutman in his capacity

as Visionary’s statutory agent was ineffective for establishing jurisdiction over

Visionary.

A trial court’s determination of whether service was completed should

not be disturbed absent an abuse of discretion. King, 2021-Ohio-1717, at ¶ 32 (8th

Dist.), citing State ex rel. Ballard v. O’Donnell, 50 Ohio St.3d 182 (1990), syllabus.

An abuse of discretion occurs when a trial court exercises its judgment in an

unwarranted way regarding a matter over which it has discretionary authority.

Nunn v. Mitchell, 2024-Ohio-4586, ¶ 16 (8th Dist.), citing Johnson v. Abdullah, 2021-Ohio-3304, ¶ 35. Under the facts and circumstances of this case, we find no

abuse of discretion in the trial court’s determination that service on Visionary was

never perfected and, accordingly, the trial court properly granted Visionary’s Civ.R.

60(B) motion to vacate the default judgment.

We note that appellants obtained a default judgment in this case of

over $300,000. Default judgments are not favored where large sums of money are

involved. Previte, 2010-Ohio-1747, at ¶ 9 (8th Dist.); see also GGNSC Lima, L.L.C.

2018-Ohio-1298, at ¶ 24 (8th Dist.), citing Draghin v. Issa, 2013-Ohio-1898, ¶ 23

(8th Dist.). And our decision comports with the basic tenet in Ohio law that

“whenever possible cases should be decided on their merits.” Rafalski v. Oates, 17

Ohio App.3d 65, 67 (8th Dist. 1994), citing Perotti v. Ferguson, 7 Ohio St.3d 1, 3

(1983). The assignment of error is overruled.

Judgment affirmed.

It is ordered that appellee recover from appellants costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to said court to carry this judgment

into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

KATHLEEN ANN KEOUGH, PRESIDING JUDGE

MICHELLE J. SHEEHAN, J., CONCURS; LISA B. FORBES, J., CONCURS IN JUDGMENT ONLY (WITH SEPARATE OPINION)

LISA B. FORBES, J., CONCURRING IN JUDGMENT ONLY:

I concur in judgment only with the majority and write separately to

express my concerns with the majority’s reliance on Previte, 2010-Ohio-1747 (8th

Dist.).

The majority relies on Previte to conclude that “this court has

recognized ‘that a statutory agent with an interest antagonistic to the defendant

corporation would render service on the statutory agent ineffectual in conferring

jurisdiction over the corporate defendant “even though the statute provides for

service on one in such relation.”’” Majority at ¶ 24, quoting Previte at ¶ 19, quoting

Walsh v. Commercial Vehicle Motors Co., 28 Ohio Dec. 603 (C.P. 1917). I fear that

without more context and explanation, this statement above gives the

misimpression that any perceived conflict between a statutory agent and its

corporation invalidates service as a matter of course. In Previte, the court was far

more limited in its recognition of what would constitute sufficient antagonism to

negate service on a statutory agent, noting only that [t]here is some authority, albeit limited, that a statutory agent with an interest antagonistic to the defendant corporation, such as representing plaintiff in her claims against the defendant corporation, would render service on the statutory agent ineffectual in conferring jurisdiction over the corporate defendant “even though the statute expressly provides for service on one in such relation.”

Previte at ¶ 19, quoting Walsh at 604.

The Previte Court’s observation of the limited authority and unusual

circumstance that may negate service was dicta. Indeed, the Previte Court’s holding

had nothing to do with any finding that the statutory agent’s interests were

antagonistic to that of the company defendant. Instead, the Previte Court reversed

the trial court’s entry of default judgment against the company defendant due to the

fact that the plaintiff in that case had named and served the statutory agent of the

company as a separate party defendant and not as the statutory agent for the

company. The Previte Court concluded that such service was insufficient to

establish service of process of the lawsuit on the corporate entity for whom the

defendant served as statutory agent. Id. at ¶ 20.

Moreover, the facts of Previte are wholly inapposite to the case at

hand. Here, unlike in Previte, the evidence established that the statutory agent for

Visionary, Troutman, never actually received service in any capacity — a fact that

the majority recognizes as its primary basis for affirming the trial court reversal of

default judgment in this case. See majority at ¶ 23.

I would not extend the Previte dicta as the majority does. The Previte

Court was careful to identify the type of antagonism that could suffice to negate service — situations where the statutory agent’s interests align more directly with

the plaintiff than the corporate entity for which it serves, such as where a statutory

agent for a business entity represented the plaintiff in a lawsuit against the business

entity. I disagree that the evidence presented by Stanich suffices to establish that

Visionary’s statutory agent, Troutman, maintained the type of antagonism toward

Visionary necessary to invalidate service upon the company. As established by the

majority, Stanich testified that Troutman and her mother were involved in an

acrimonious divorce, that he had named Stanich personally as a third-party

defendant in those divorce proceedings, and that she holds a belief that Troutman

would not have informed her if he had received service of a complaint against

Visionary. But Stanich’s belief that Troutman would be antagonistic toward her

personally, without more, does not serve to show that Troutman would also be

antagonistic toward Visionary. I, therefore, would find that nothing was presented

to demonstrate that Troutman harbored any antagonism towards the business

entity Visionary, for which he served as the statutory agent.