LexisNexis v. Holmes

2017 Ohio 1388

• Court: Ohio Court of Appeals
• Decided: April 14, 2017
• Docket: 27238
• Status: Published

Opinion

[Cite as LexisNexis v. Holmes, 2017-Ohio-1388.]

IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY

LEXISNEXIS, a Division of RELX, Inc. : : Appellate Case No. 27238 Plaintiff-Appellee : : Trial Court Case No. 16-CV-2076 v. : : (Civil Appeal from THOMAS T. HOLMES, Esq. : Common Pleas Court) : Defendant-Appellant : :

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OPINION

Rendered on the 14th day of April, 2017.

ANDREW C. STORAR, Atty. Reg. No. 0018802, MICHAEL W. SANDNER, Atty. Reg. No. 0064107, and MICHELLE T. SUNDGAARD, Atty. Reg. No. 009606, Pickrel, Schaefer & Ebeling Co., 2700 Kettering Tower, Dayton, Ohio 45423 Attorneys for Plaintiff-Appellee

THOMAS T. HOLMES, Atty. Reg. No. 0024603, 3285 Grenway Road, Shaker Heights, Ohio 44122 Attorney for Defendant-Appellant

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HALL, P.J. -2-

{¶ 1} Thomas Holmes appeals from the trial court’s overruling of his Civ.R. 60(B)

motion for relief from the default judgment entered for LexisNexis and the court’s

overruling of his motion to transfer the case. Finding no error, we affirm.

I. Background

{¶ 2} Holmes, an attorney in Shaker Heights, Ohio, entered into a Subscription

Agreement with LexisNexis in May 2014 for online research services. Holmes failed to

pay in March 2015, and the following September, LexisNexis cancelled the services for

non-payment. In April 2016, LexisNexis filed suit against Holmes claiming breach of

contract and asking for declaratory judgment. LexisNexis claimed that Holmes owed it

$11,768.73 plus interest. The record shows that Holmes was served with the complaint

on May 4. On May 23, Holmes called LexisNexis’s attorney and asked for a three-week

extension to file an answer. Although Holmes’ affidavit concerning the phone

conversation for the extension contains some uncertainty, at the least, LexisNexis’s

attorney acquiesced to and did not oppose the extension, and does not challenge it here.

Holmes did not notify the trial court of the extension and did not otherwise document it.

{¶ 3} On June 7, the trial court issued a notice of default to LexisNexis that service

had been perfected and it appeared that the defendant was “in default for answer or

appearance.” The court’s notice indicated that LexisNexis should either dismiss the action

or ask for a default judgment. See Mont. Co. C. P. R. 2.01. On June 16, LexisNexis filed

an application for a default judgment. The trial court granted the application and the next

day, June 17, entered default judgment against Holmes for $11,768.73 plus $2,346 in

attorney fees plus interest and costs. The court also declared that the Subscription -3-

Agreement was valid and enforceable. Holmes was served with the default judgment on

June 20.

{¶ 4} On June 22, Holmes filed a motion to transfer the case to Cuyahoga County

on venue grounds. The trial court concluded that the motion was moot because judgment

had already been entered. On July 11, Holmes filed a motion for relief from the default

judgment under Civ.R. 60(B)(1) and another motion to transfer the case. The trial court

overruled both motions.

{¶ 5} Holmes appealed.

II. Analysis

{¶ 6} Holmes assigns three errors to the trial court. The first assignment of error

argues that the court erred by failing to comply with the notice and hearing requirements

in Civ.R. 55(A). The second assignment of error argues that the trial court erred by

overruling the Civ.R. 60(B) motion. And the third assignment of error argues that the trial

court erred by overruling the motion to transfer the case.

{¶ 7} Civ.R. 60(B) permits a court to grant a party relief from a final judgment. To

prevail under Civ.R. 60(B), the movant must satisfy a three-prong test. The moving party

must show 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.” GTE Automatic Electric

v. Arc Industries, 47 Ohio St.2d 146, 150-151, 351 N.E.2d 113 (1976). “Motions for relief

from judgment under Civ.R. 60(B) are addressed to the sound discretion of the trial court,

and the court’s ruling ‘will not be disturbed on appeal absent a showing of abuse of

discretion.’ ” Jackson v. Hendrickson, 2d Dist. Montgomery No. 21921, 2008-Ohio-491, ¶ -4-

28, quoting Griffey v. Rajan, 33 Ohio St.3d 75, 77, 514 N.E.2d 1122 (1987).

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

{¶ 8} We begin with the second assignment of error, which challenges the trial

court’s determination that Holmes failed to satisfy the first and second prongs of the Civ.R.

60(B) test.

{¶ 9} The first prong of the test for relief requires the movant to show that if relief

was granted, the movant has a meritorious defense to present. “Under Civ.R. 60(B), a

movant’s burden is only to allege a meritorious claim, not to prevail on the merits of the

claims.” (Citation omitted.) Moore v. Emmanuel Family Training Ctr., Inc., 18 Ohio St.3d

64, 67, 479 N.E.2d 879 (1985). “ ‘A meritorious defense is one which, if proved, would

entitle a party to the relief requested.’ ” Cincinnati Ins. Co. v. Schaub, 2d Dist. Montgomery

No. 22419, 2008-Ohio-4729, ¶ 46, quoting Williamson v. Saranda Consol. Ltd.

Partnership, 2d Dist. Montgomery No. 11507, 1989 WL 150791, * 4 (Dec. 14, 1989).

“Relief from a final judgment should not be granted unless the party seeking such relief

makes at least a prima facie showing that the ends of justice will be better served by

setting the judgment aside.” Aurora Loan Servs., L.L.C. v. Wilcox, 2d Dist. Miami No.

2009 CA 9, 2009-Ohio-4577, ¶ 14. Accordingly, “the motion and/or affidavit submitted in

support of the motion must set out operative facts which, if true, constitute a prima facie

showing of the claim or defense concerned. A prima facie showing is one which is

‘[s]ufficient to establish a fact or raise a presumption unless disapproved or rebutted.’ ”

(Citation omitted.) Portfolio Recovery Associates v. Thacker, 2d Dist. Clark No. 2008 CA

119, 2009-Ohio-4406, ¶ 41, quoting Stewart v. Heard, 2d Dist. Montgomery No. 20787,

2005-Ohio-5241, ¶ 24. “Broad, conclusory statements do not satisfy the requirement that -5-

a Civ.R. 60(B) motion must be supported by operative facts that would warrant relief from

judgment.” (Citations omitted.) Aurora at ¶ 14.

{¶ 10} The trial court here found that Holmes “fail[ed] to submit any proper

evidence for the court’s consideration as to whether he had a meritorious defense or claim

to present if relief was granted.” But Holmes says that he alleged three meritorious

defenses. Indeed, in his motion for relief, Holmes says: “Among the defenses that the

Defendant has to this action are 1) venue is not proper in this court, 2) the dispute is

subject to binding arbitration pursuant to the agreement between the parties, and 3) the

computation of damages the Plaintiff states it is entitled to is contrary to the agreement

between the parties and written representations made by Plaintiff.” But this is all Holmes

says in his motion. We conclude the trial court did not abuse its discretion by determining

Appellant’s submission was not enough.

{¶ 11} It is the movant who has the burden to “demonstrate that the interests of

justice demand the setting aside of a judgment normally accorded finality.” Rose

Chevrolet, Inc. v. Adams, 36 Ohio St.3d 17, 21, 520 N.E.2d 564 (1988). So though the

movant is not required to submit evidence in support of the motion for relief, the movant

must at least “enlighten the court as to why relief should be granted.” Id. Holmes submitted

an affidavit in support of his motion for relief, but he does not claim in the affidavit that he

has a meritorious defense. Indeed, the affidavit contains no facts about any of the three

defenses that Holmes asserts. So though Holmes does assert defenses, he does not

provide reasons to think that the defenses have merit. Rather, he makes broad,

conclusory statements that do not make a prima facie showing and do not set forth any

operative facts to assist the trial court in determining whether grounds exist for the -6-

defenses. Moreover, with respect to venue, the trial court referred to the parties

subscription agreement that contains an exclusive forum selection clause for the courts

of Montgomery County, Ohio. And, the same agreement specifically excludes claims for

non-payment from the arbitration provision. That leaves only Holmes non-specific

contention that “the computation of damages * * *is contrary to the agreement.” Without

more in the record, we cannot say that the trial court abused its discretion by finding that

Holmes failed to establish the first prong of the test for relief.

{¶ 12} The relief test’s second prong requires the movant to show entitlement to

relief under one of the grounds stated in Civ. R. 60(B)(1) to (5). Holmes argues in his

motion for relief that he is entitled to relief under Civ.R. 60(B)(1), “mistake, inadvertence,

surprise or excusable neglect.” He says that he had a reasonable belief that he had an

additional three weeks to file a response to the complaint because, as Holmes states in

his affidavit, he and LexisNexis’s attorney had agreed to a three-week extension of time

to file an answer. Based on this understanding, says Holmes, he filed the motion to

transfer on June 22, which he believed was within the extended time period. If it was not

filed before the extension deadline, Holmes says, his failure to file the response timely

was due to a mistake as to whether LexisNexis had granted his request for an extension.

While the failure to establish the first prong is alone a sufficient basis to deny relief, we

briefly consider the second prong.

{¶ 13} The trial court determined that Holmes’s conduct does not show mistake,

inadvertence, surprise, or excusable neglect but rather a disregard for the judicial system.

The court said that Holmes’s assertions in his motion for relief do not constitute reasons

justifying relief from judgment. According to the court, a defendant is required to respond -7-

to the complaint in a timely manner and to let the court know what that response is.

Although Holmes asserts that he and LexisNexis’s counsel agreed to extend the time to

file an answer, said the court, he failed to seek an extension from the court or otherwise

let the court know what his answer was.

{¶ 14} The parties appear to have differing beliefs as to when the three-week

extension expired. Holmes was served on May 4,1 so by rule his answer was due on June

6.2 The parties agreed to a three-week extension on May 23. LexisNexis believes that

the extension expired three weeks later, on June 13. But Holmes contends that the

extension expired three weeks after the June 6 deadline, which would be near the end of

June. The trial court did not resolve this confusion. Nevertheless, Civ.R. 6(B) gives a trial

court discretion to extend the deadline for filing an answer at the request of a party.

Holmes, an attorney, would know this. Also, had Holmes filed something about the

parties’ deadline-extension agreement with the trial court, or even had he contacted the

trial court in some other manner, the confusion in the agreement might have been

avoided. We cannot say that the trial court abused its discretion by finding that Holmes

failed to establish the second prong of the test for relief.

{¶ 15} Because Holmes failed to satisfy the first and second prongs of the test for

relief, the trial court did not err by overruling his Civ.R. 60(B) motion for relief.

{¶ 16} The second assignment of error is overruled.

1 According to the trial court’s docket, Holmes was served on May 4, though Holmes says that he did not receive the complaint until May 9. 2 A defendant has twenty-eight days after service of the complaint to respond. Civ.R.

12(A)(1). The day of service is not included in that time period, and if the last day of the period falls on a weekend, the period is extended to the next weekday. Civ.R. 6(A). Also, if service is by mail under Civ.R. 5(B)(2)(c), as it was here, the defendant has an additional three days. Civ.R. 6(D). -8-

B. Lack of notice and a hearing under Civ.R. 55(A)

{¶ 17} The first assignment of error argues that the trial court erred by failing to

comply with Civ.R. 55’s notice and hearing requirements.

{¶ 18} Civ.R. 55(A) provides that “[i]f the party against whom judgment by default

is sought has appeared in the action, he * * * shall be served with written notice of the

application for judgment at least seven days prior to the hearing on such application.” The

rule does not require a hearing. The trial court here entered the default judgment the day

after LexisNexis filed its application, and the court did not hold a hearing. It is doubtful

that Holmes adequately raised the alleged violations of Civ.R. 55 in his motion for relief.

On the question of notice, Holmes says in his motion that the trial court should grant relief

“because the Default Judgment in this case was entered without notice to Defendant,

although the Plaintiff knew Defendant intended to respond to the Complaint, in violation

of the Ohio Rules of Civil Procedure.” But later in his motion, Holmes argues that the trial

court failed to give him the notice under Civ.R. 6(C). It is only now, on appeal, that he

argues that the trial court should have given him the notice that Civ.R. 55(A) requires.

{¶ 19} Even if, as a matter of law, Holmes should have received notice under

Civ.R. 55(A), the trial court did not err by overruling his motion for relief. The present

appeal is from the final order overruling Holmes’s Civ.R. 60(B) motion for relief, not from

the default judgment itself. This means that Holmes must show that the trial court erred

by finding that he failed to satisfy the Civ.R. 60(B) test for relief. Holmes’s claims about

the lack of notice and a hearing under Civ.R. 55 might show that he is entitled to relief

under Civ.R. 60(B)(5), as “any other reason justifying relief from the judgment,” so as to -9-

satisfy the second prong of the test. But as we already concluded, the trial court did not

err by determining that Holmes failed to show a meritorious defense, the test’s first prong.

Therefore we cannot say that the trial court erred by denying relief, even if he was entitled

to notice and a hearing under Civ.R. 55(A). Compare Miamisburg Motel v. Huntington

Natl. Bank, 88 Ohio App.3d 117, 127-128, 623 N.E.2d 163 (2d Dist.1993)3 (concluding

that even if the appellant was entitled to notice under Civ.R. 55(A), the trial court did not

err by overruling his motion for relief under Civ.R. 60(B)(5), because the appellant failed

to satisfy the test’s third prong, timeliness).

{¶ 20} The first assignment of error is overruled.

C. The motion to transfer

{¶ 21} The third assignment of error argues that the trial court should have granted

Holmes’s motion to transfer this case to Cuyahoga County on venue grounds. Because

we have concluded that the court did not err by denying Holmes relief from the default

judgment, this issue is moot. The default judgment was entered before Holmes filed the

motion to transfer, leaving nothing to transfer.

{¶ 22} The third assignment of error is overruled.

3 We note that Miamisburg Motel has repeatedly, AND INCORRECTLY, been cited, by this court and others, for the proposition that a phone call to plaintiff’s counsel expressing an intent to defend the lawsuit constitutes an “appearance” for purposes of Civ. R. 55. That is unquestionably NOT the holding of the case. In the lead opinion of Miamisburg the phone-call-appearance notion is expressed. But the first concurring opinion specifically rejected the idea that a phone call is an appearance. The second concurring also indicated that a phone call should be insufficient unless there is an indication the defaulting party or its counsel has been misled into a default by plaintiff’s counsel. The holding of Miamisburg is that a trial court does not abuse its discretion by denying Civ. R. 60(B) relief from judgment when there is no more than a phone call to plaintiff’s counsel. -10-

III. Conclusion

{¶ 23} We have overruled each of the assignments of error presented. The trial

court’s judgment is therefore affirmed.

WELBAUM, J. and TUCKER, J., concur.

Copies mailed to:

Andrew C. Storar Michael W. Sandner Michelle T. Sundgaard Thomas T. Holmes Hon. Mary K. Huffman