Mill City Mtge. Loan Trust 2019-1, Wilmington Savs. Fund Soc., FSB v. Knight

2021 Ohio 4135

• Court: Ohio Court of Appeals
• Decided: November 22, 2021
• Docket: 2020-A-0053
• Status: Published

Opinion

[Cite as Mill City Mtge. Loan Trust 2019-1, Wilmington Savs. Fund Soc., FSB v. Knight, 2021-Ohio-4135.]

IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT ASHTABULA COUNTY

MILL CITY MORTGAGE LOAN CASE NO. 2020-A-0053 TRUST 2019-1, WILMINGTON SAVINGS FUND SOCIETY, FSB, AS TRUSTEE, Civil Appeal from the Court of Common Pleas Plaintiff-Appellee,

-v- Trial Court No. 2020 CV 00345

TODD B. KNIGHT, a.k.a. TODD KNIGHT, SR., et al.,

Defendant-Appellant.

OPINION

Decided: November 22, 2021 Judgment: Affirmed

David T. Brady and Suzanne M. Godenswager, Sandhu Law Group, LLC, 1213 Prospect Avenue, Suite 300, Cleveland, OH 44115 (For Plaintiff-Appellee).

Anne M. Reese, Legal Aid Society of Cleveland, 121 East Walnut Street, Jefferson, OH 44047 and Philip D. Althouse, Legal Aid Society of Cleveland, 1530 West River Road, Suite 301, Elyria, OH 44035 (For Defendant-Appellant).

MARY JANE TRAPP, P.J.

{¶1} Appellant, Todd B. Knight, a.k.a. Todd Knight, Sr. (“Mr. Knight”), appeals

the judgment of the Ashtabula County Court of Common Pleas granting default judgment

against him and issuing a decree of foreclosure in favor of appellee, Mill City Mortgage

Loan Trust 2019-1, Wilmington Savings Fund Society, FSB, as Trustee (“Mill City”).

{¶2} Mr. Knight asserts one assignment of error, contending that the trial court

deprived him of due process by granting Mill City’s motion for default judgment without providing him 14 days to respond pursuant to Civ.R. 6(C)(1) and the trial court’s local

rules.

{¶3} After a careful review of the record and pertinent law, we find that the trial

court did not abuse its discretion in entering a default judgment against Mr. Knight. The

proper procedure for holding a party in default is set forth in Civ.R. 55(A). Since Mr.

Knight neither answered the complaint nor appeared prior to Mill City’s filing of its motion

for default judgment, the response deadlines in Civ.R. 6(C)(1) and similar local rules were

not applicable, and the trial court was not required to provide him 14 days to respond.

{¶4} Thus, we affirm the judgment of the Ashtabula County Court of Common

Pleas.

Substantive and Procedural History

{¶5} On August 14, 2020, Mill City filed a complaint for “money, foreclosure in

reformation, and other equitable relief” against Mr. Knight and others in the Ashtabula

County Court of Common Pleas. Mr. Knight was served with the complaint and summons

by certified mail on August 20 and by personal service on August 22.

{¶6} Mr. Knight failed to appear or respond to the complaint. On October 9, Mill

City filed a motion for default judgment, a military affidavit, and an affidavit of status of

account. Four days later, on October 13, the trial court filed a judgment entry granting

default judgment against Mr. Knight and issuing a decree of foreclosure in favor of Mill

City.

{¶7} On October 15, Mr. Knight, through counsel, filed a notice of appearance

and a motion for leave to file an answer instanter. According to Mr. Knight’s counsel, she

was unaware of the trial court’s October 13 judgment entry at such time. The trial court

Case No. 2020-A-0053 filed a judgment entry on the same date granting Mr. Knight’s motion for leave and

permitting him until October 30 to file an answer.

{¶8} On October 20, Mr. Knight filed an answer and a motion to vacate the

October 13 judgment entry pursuant to Civ.R. 60(B). The trial court scheduled a hearing

on Mr. Knight’s motion to vacate. Prior to the scheduled hearing, Mr. Knight filed a notice

of appeal of the October 13 judgment entry and a notice withdrawing his motion to vacate.

{¶9} Mill City filed a precipe for an order of sale, which the clerk of courts

subsequently issued. Mr. Knight filed a motion to stay execution of the foreclosure

judgment pursuant to Civ.R. 62(B), which the trial court denied.

{¶10} Mr. Knight filed a motion for stay in this court, which we granted under

certain conditions, including that Mr. Knight, in lieu of a supersedeas bond, execute a quit

claim deed to Mill City and deposit it with the clerk of courts.

{¶11} Mr. Knight raises the following assignment of error:

{¶12} “The Trial Court erred to the prejudice of Appellant and deprived him of Due

Process and an opportunity to defend when it granted a Motion for Default only four days

after it was filed, without following Ohio Civ. R. 6(C)(1) and Loc. R. 3 of the Court of

Common Pleas of Ashtabula County, General Division, which both provide litigants a 14

day response time to a Motion.”1

1. Mill City obtained four extensions but did not ultimately file an appellee’s brief. App.R. 18(C) provides, in relevant part, that “[i]f an appellee fails to file the appellee’s brief within the time provided by this rule, or within the time as extended, * * * in determining the appeal, the court may accept the appellant’s statement of the facts and issues as correct and reverse the judgment if appellant’s brief reasonably appears to sustain such action.” Despite Mill City’s failure to file an appellee’s brief, the applicable law does not support reversal of the trial court’s judgment. 3

Case No. 2020-A-0053 Standard of Review

{¶13} We review a trial court’s decision to grant a default judgment under an

abuse of discretion standard. Sericola v. Johnson, 2016-Ohio-1164, 61 N.E.3d 643, ¶ 18

(11th Dist.). An abuse of discretion is the “‘failure to exercise sound, reasonable, and

legal decision-making.’” State v. Beechler, 2d Dist. Clark No. 09-CA-54, 2010-Ohio-1900,

¶ 62, quoting Black’s Law Dictionary 11 (8th Ed.Rev.2004). When an appellate court is

reviewing a pure issue of law, the mere fact that the reviewing court would decide the

issue differently is enough to find error. Id. at ¶ 67. By contrast, where the issue on

review has been confided to the discretion of the trial court, the mere fact that the

reviewing court would have reached a different result is not enough, without more, to find

error. Id.

Due Process

{¶14} Mr. Knight asserts that the trial court violated his due process rights by

failing to follow Civ.R. 6(C)(1) and Ashtabula County Court of Common Pleas Loc.R. 3.

{¶15} Civ.R. 6(C)(1), which was amended effective July 1, 2019, states as follows:

{¶16} “Motion Responses and Movants’ Replies Generally. Responses to a

written motion, other than motions for summary judgment, may be served within fourteen

days after service of the motion. Responses to motions for summary judgment may be

served within twenty-eight days after service of the motion. A movant’s reply to a

response to any written motion may be served within seven days after service of the

response to the motion.”

{¶17} According to the 2019 Staff Notes, “[t]he provisions of Division (C)(1)

supersede and replace the differing deadlines for responding to motions imposed by the

Case No. 2020-A-0053 numerous local rules of Ohio trial courts, thereby eliminating confusion and creating

consistency by providing uniform statewide deadlines.”

{¶18} Ashtabula County Court of Common Pleas Loc.R. 3, entitled “time for filing

pleadings,” provides as follows:

{¶19} “Unless otherwise provided by law or other rule, all pleadings, amended

pleadings or motions shall be filed within fourteen (14) days after the filing of any entry

granting leave to file or overruling or sustaining a motion unless otherwise specified in the

entry itself.

{¶20} “The opposing party shall move or otherwise respond to the pleading,

amended pleadings, or motion within fourteen (14) days of filing such pleading, amended

pleading or motion unless otherwise ordered by the Court.”

{¶21} Loc.R. 3 appears to be applicable only to responses to pleadings and

motions filed following the trial court’s issuance of a judgment entry. However, we note

that Loc.R. 6(C)(2), entitled “all other motions,” provides as follows:

{¶22} “All other motions will be decided without oral hearing unless oral argument

is requested and determined necessary by the Court. The moving party shall file with the

motion a brief supporting memorandum containing the authorities relied upon and any

affidavits or other supporting documents required or appropriate to file with the motion.

Each party opposing the motion shall file a written response within fourteen (14) days

after receipt of the motion. Reply or additional briefs or memoranda shall be submitted

only with approval of the Court. Motions for leave to plead shall be in accordance with

local rules of Court.” (Emphasis added.)

Case No. 2020-A-0053 {¶23} In support of his due process argument, Mr. Knight cites several decisions

from this court and others reversing a trial court’s judgment based on its failure to follow

similar procedural rules. See Hillabrand v. Drypers Corp., 87 Ohio St.3d 517, 721 N.E.2d

1029 (2000) (involving a motion for sanctions); El-Mahdy v. Mahoning Natl. Bank, 7th

Dist. Mahoning No. 01-C.A.-27, 2002-Ohio-3851 (same); Akron v. Heller, 9th Dist.

Summit No. 26969, 2013-Ohio-5228 (involving a motion for relief from judgment);

Rendina v. Rendina, 11th Dist. Lake No. 91-L-019, 1992 WL 217993 (Feb. 28, 1992)

(involving a motion for guardian ad litem fees); In re Marquez, 11th Dist. Geauga No. 96-

G-1976, 1996 WL 702461 (Nov. 22, 1996) (same); Zamos v. Zamos, 11th Dist. Portage

No. 2004-P-0108, 2005-Ohio-6075 (involving a motion to pay child support arrearages).

{¶24} We find such cases to be distinguishable, however. Unlike the foregoing

cases, this case involves the trial court’s granting of a motion for default judgment that

the plaintiff filed after the defendant failed to answer or appear, which is governed by

Civ.R. 55.

Default Judgment

{¶25} The proper procedure for holding a party in default is set forth in Civ.R.

55(A). AMCA Internatl. Corp. v. Carlton, 10 Ohio St.3d 88, 90, 461 N.E.2d 1282 (1984).

It provides, in relevant part, as follows:

{¶26} “Entry of Judgment. When a party against whom a judgment for affirmative

relief is sought has failed to plead or otherwise defend as provided by these rules, the

party entitled to a judgment by default shall apply in writing or orally to the court therefor;

but no judgment by default shall be entered against a minor or an incompetent person

unless represented in the action by a guardian or other such representative who has

Case No. 2020-A-0053 appeared therein. If the party against whom judgment by default is sought has appeared

in the action, he (or, if appearing by representative, his representative) shall be served

with written notice of the application for judgment at least seven days prior to the hearing

on such application.” (Emphasis added.)

{¶27} According to the Supreme Court of Ohio, “[d]efault, under both pre-Civil

Rule decisions and under Civ.R. 55(A), is a clearly defined concept.” Ohio Valley

Radiology Assocs., Inc. v. Ohio Valley Hosp. Assn., 28 Ohio St.3d 118, 121, 502 N.E.2d

599 (1986). “‘A default by a defendant * * * arises only when the defendant has failed to

contest the allegations raised in the complaint and it is thus proper to render a default

judgment against the defendant as liability has been admitted or ‘confessed’ by the

omission of statements refuting the plaintiff’s claims.’” Id., quoting Reese v. Proppe, 3

Ohio App.3d 103, 105, 443 N.E.2d 992 (8th Dist.1981). “It is only when the party against

whom a claim is sought fails to contest the opposing party’s allegations by either pleading

or ‘otherwise defend[ing]’ that a default arises.” Id., quoting Civ.R. 55(A). The rule is

“logically consistent with the general rule of pleading contained in Civ.R. 8(D) * * * that

‘[a]verments in a pleading to which a responsive pleading is required * * * are admitted

when not denied in the responsive pleading.’” Id., quoting Civ.R. 8(D). Thus, “[i]f the

defending party has failed to appear in the action, a default judgment may be entered

without notice.” (Emphasis added.) Id. at 120.

{¶28} However, when a party has “appeared” in an action, the opposing party may

not take a default judgment against that party absent a seven-day notice. See id.

According to the Supreme Court of Ohio, this notice requirement is “‘intended to protect

those parties who, although delaying in a formal sense by failing to file [timely] pleadings

Case No. 2020-A-0053 * * *, have otherwise indicated to the moving party a clear purpose to defend the suit.’”

AMCA at 91, quoting H. F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 432

F.2d 689, 691 (D.C.Cir.1970).

{¶29} Based on the foregoing authority, several Ohio appellate courts have held

that response deadlines set forth in Civ.R. 6 and/or similar local rules are inapplicable to

motions for default judgment filed pursuant to Civ.R. 55(A) following a defendant’s failure

to file an answer or appear. See L.S. Industries v. Coe, 9th Dist. Summit No. Civ.A.

22603, 2005-Ohio-6736, ¶ 14, 17; Hover v. O’Hara, 12th Dist. Warren No. CA2006-06-

077, 2007-Ohio-3614, ¶ 13; Bank of Am., N.A. v. Sullivan, 3d Dist. Allen No. 1-15-09,

2015-Ohio-2736, ¶ 15; Natl. Collegiate Student Loan Trust 2007-2 v. Tigner, 2d Dist.

Montgomery Nos. 27841 & 28035, 2018-Ohio-4442, ¶ 13. Notably, the Third District

Court of Appeals’ decision in Sullivan involved a foreclosure case with nearly identical

facts to the present matter.

{¶30} According to the above courts, the appellant effectively admitted the

allegations in the complaint because he or she neither answered the allegations in the

complaint nor appeared prior to the plaintiff’s filing of its motion for default judgment.

Thus, the appellant was not entitled to the notice and hearing requirements of Civ.R.

55(A), and a default judgment could be entered against the appellant without notice. See

L.S. Industries at ¶ 17; Hover at ¶ 12; Sullivan at ¶ 15; Tigner at ¶ 17.

{¶31} The Twelfth District reasoned that “[w]here there is no requirement that

appellant be provided notice of the filing of the default motion, a local rule that sets the

deadlines for a party’s response to a filed motion is simply not applicable to this situation.”

Hover at ¶ 13.

Case No. 2020-A-0053 {¶32} Similarly, the Ninth District reasoned that “where no response can

reasonably be anticipated and no notice to the defaulting party is necessary,” there is “no

reason to delay the administration of justice and the entry of default judgment, where such

judgment is appropriate.” L.S. Industries at ¶ 14. According to the court, “[t]he interests

of justice and judicial economy do not dictate that a trial court conduct a hearing and delay

ruling on a timely motion for default judgment on the chance that the party in default might

at some speculative later date enter an appearance in the action.” Id. at ¶ 17.

{¶33} The Third District in Sullivan also rejected the appellant’s argument that the

trial court’s ruling on the motion for default judgment precluded him from appearing and

responding to the motion. Id. at ¶ 16. According to the court, the appellant was not

precluded from filing a motion for relief from judgment under Civ.R. 60(B) if he had a valid

defense to the motion for default judgment. Id. However, the appellant in Sullivan made

the tactical decision not to pursue that avenue for relief. Id. Instead, he filed a motion for

reconsideration, which the Supreme Court of Ohio has determined is a nullity. Id.; see

Pitts v. Ohio Dept. Transp., 67 Ohio St.2d 378, 379, 423 N.E.2d 1105 (1981) (“[M]otions

for reconsideration of a final judgment in the trial court are a nullity”).

Analysis

{¶34} In this case, Mr. Knight failed to answer or appear prior to Mill City’s filing of

its motion for default judgment, effectively admitting the allegations in the complaint.

Therefore, the notice and hearing requirements of Civ.R. 55(A) were not applicable.

Since Civ.R. 55(A) did not even require Mill City to provide notice of its motion for default

judgment, the response deadlines in Civ.R. 6(C)(1) and the trial court’s local rules were

Case No. 2020-A-0053 not applicable. Thus, the trial court was not required to give Mr. Knight 14 days to respond

to Mill City’s motion for default judgment.

{¶35} Although the trial court subsequently granted Mr. Knight’s motion for leave

to file an answer instanter, this act had no effect on the October 13 judgment entry. A

judgment decree in foreclosure is a final order. CitiMortgage, Inc. v. Roznowksi, 139 Ohio

St.3d 299, 2014-Ohio-1984, 11 N.E.3d 1140, ¶ 23. Courts have consistently treated as

void actions taken by a trial court subsequent to the entry of a final judgment. See Allstate

Ins. Co. v. Witta, 9th Dist. Summit No. 25738, 2011-Ohio-6068, ¶ 9-11. A trial court may

only relieve a party from judgment by the mechanisms provided by the Ohio Rules of Civil

Procedure, which, in this case, would be a motion for relief from judgment pursuant to

Civ.R. 60(B). See id. at ¶ 19; Civ.R.55(B) (“If a judgment by default has been entered,

the court may set it aside in accordance with Rule 60(B)”).

{¶36} The record demonstrates that Mr. Knight filed a motion to vacate the trial

court’s October 13 judgment entry pursuant to Civ.R. 60(B). Prior to the trial court’s

consideration, however, Mr. Knight filed a notice of appeal of the judgment entry and a

notice withdrawing his motion.

{¶37} While an appeal divests a trial court of jurisdiction to consider a Civ.R. 60(B)

motion for relief from judgment, jurisdiction may be conferred on the trial court through an

order by the reviewing court remanding the matter for consideration of the Civ.R. 60(B)

motion. Howard v. Catholic Social Serv. of Cuyahoga Cty., Inc., 70 Ohio St.3d 141, 147,

637 N.E.2d 890 (1994). Thus, Howard provides a mechanism by which a party may

protect its rights through an appeal and still obtain a ruling on a Civ.R. 60(B) motion while

the appeal is pending, i.e., by filing a motion to remand in conjunction with the notice of

Case No. 2020-A-0053 appeal. See Willoughby Eastlake City School Dist. v. Lake Cty. Court of Common Pleas,

11th Dist. Lake No. 99-L-130, 2000 WL 522456, *5 (Apr. 21, 2000). We caution litigants

to consider the foregoing authority prior to withdrawing a potentially meritorious Civ.R.

60(B) motion.

{¶38} While we are mindful of the serious consequences of foreclosure and are

sympathetic to Mr. Knight’s argument, the Supreme Court of Ohio has held that “the rules

of procedure must be applied consistently * * *.” Davis v. Immediate Medical Svcs., Inc.,

80 Ohio St.3d 10, 15, 684 N.E.2d 292 (1997). According to the court, “‘[h]owever hurried

a court may be in its efforts to reach the merits of a controversy, the integrity of procedural

rules is dependent upon consistent enforcement because the only fair and reasonable

alternative thereto is complete abandonment.’” Id., quoting Miller v. Lint, 62 Ohio St.2d

209, 214, 404 N.E.2d 752 (1980).

{¶39} Accordingly, the trial court did not abuse its discretion in entering a default

judgment against Mr. Knight.

{¶40} Mr. Knight’s sole assignment of error is without merit.

{¶41} For the foregoing reasons, the judgment of the Ashtabula County Court of

Common Pleas is affirmed.

THOMAS R. WRIGHT, J.,

MATT LYNCH, J.,

concur.

Case No. 2020-A-0053