Recovery Funding, L.L.C. v. Spiers

2020 Ohio 364

• Court: Ohio Court of Appeals
• Decided: February 4, 2020
• Docket: 19AP000274
• Status: Published

Opinion

[Cite as Recovery Funding, L.L.C. v. Spiers, 2020-Ohio-364.]

COURT OF APPEALS FRANKLIN COUNTY, OHIO TENTH APPELLATE DISTRICT

: JUDGES: RECOVERY FUNDING, LLC : Hon. John W. Wise, P.J. : Hon. Craig R. Baldwin, J. Plaintiff-Appellant : Hon. Earle E. Wise, Jr., J. : -vs- : Sitting by Assignment of the : Supreme Court of Ohio : EDWARD F. SPIERS, et al. : Case No. 19AP000274 : Defendants-Appellees : OPINION

CHARACTER OF PROCEEDING: Appeal from the Court of Common Pleas, Case No. 17CV008575

JUDGMENT: Affirmed

DATE OF JUDGMENT ENTRY: February 4, 2020

APPEARANCES:

For Plaintiff-Appellant For Defendants-Appellees

RICK BRUNNER No Appearance BRUNNER QUINN 35 North Fourth Street, Suite 200 Columbus, Ohio 43215 Franklin County, Case No. 19AP000274 2

Wise, John, P.J.

{¶1} Plaintiff-Appellant Recovery Funding, LLC appeals the January 16, 2018,

February 9, 2018, February 26, 2018, June 4, 2018 and March 27, 2019, decisions

entered in the Franklin County Court of Common Pleas denying its various motions and

dismissing its Complaint.

STATEMENT OF THE FACTS AND CASE

{¶2} The facts as found by the trial court are as follows:

{¶3} On June 22, 2017, Plaintiff Recovery Funding, LLC, as assignee of The

Brunner Firm Co., LPA dba Brunner Quinn, filed suit against Defendant Edward F,

Spiers, Defendant Nashon E. Owens, and Defendant Buckeye Building Solutions LTD

in the Franklin County Municipal Court alleging it was owed $10,096.64 in unpaid legal

fees. See Recovery Funding, LLC v. Edward F. Spiers, et al., Case No. 2017CVF

020734.

{¶4} The municipal court granted default judgment and set the matter for a

damages hearing before a magistrate.

{¶5} On September 12, 2017, the magistrate adopted a Proposed Decision

submitted by Plaintiff, recommending that Plaintiff be awarded $10,275.22 in

compensatory damages and exemplary damages up to the court’s jurisdictional limit in

the amount of $4,724.78. The municipal court judge adopted the magistrate’s

recommendation the same day.

{¶6} On September 22, 2017, following this award of judgment in the Municipal

Court, Plaintiff-Appellant filed a Creditor’s Bill Complaint and Related Relief by

Judgment Creditor action in the Franklin County Court of Common Pleas alleging that it Franklin County, Case No. 19AP000274 3

was entitled to the remainder of the treble/exemplary damages awarded by the

municipal court, which the municipal court could not order due to its jurisdictional limit.

Plaintiff specifically sought a declaratory judgment that it was entitled to $21,375.44 in

damages in addition to the amount awarded by the municipal court.

{¶7} On December 15, 2017, Plaintiff Recovery Funding, LLC, filed a Motion

Pursuant to Civil Rule 8(D) to Have Averments of the Complaint Deemed Admitted as

True and a Motion for Default Judgment as to Defendant Nashon Owens.

{¶8} Defendant Nashon Owens appeared pro se and moved to dismiss

Plaintiff’s Complaint.

{¶9} On January 9, 2018, Plaintiff filed an Amended Complaint. The Amended

Complaint did not include Defendant Nashon Owens in the case caption. As such, on

January 16, 2018, the trial court found Plaintiff's motion for default judgment and

Owens' motion to dismiss to be moot.

{¶10} On January 17, 2018, Plaintiff moved to strike Nashon Owens' motion to

dismiss. As the trial court had already determined that Nashon Owens' motion was

moot, the trial court found Plaintiff’s motion to strike moot as well

{¶11} On January 25, 2018, Plaintiff filed a Motion Pursuant to Civ.R 60(A) with

Respect to the Court's Entry of January 16, 2018. Plaintiff asserted that it did not

dismiss Defendant Nashon Owens from its Amended Complaint, and therefore, the trial

court's January 16, 2018, Entry contained a "clerical error". Citing Civ.R. 10(A), the trial

court rejected Plaintiff's argument that it was not necessary to include Defendant

Nashon Owens in the caption of its Amended Complaint. Franklin County, Case No. 19AP000274 4

{¶12} On February 26, 2018, the trial court denied Plaintiff's Motion to Have

Averments in Creditor's Bill Complaint Deemed Admitted as True Pursuant to Civ.R.

8(D) and for Default Judgment Pursuant to Civ.R. 55(A) as to Defendant Edward F.

Spiers, filed December 28, 2017, also based on Civil R. 10(A).

{¶13} On June 4, 2018, the trial court denied Plaintiff’s Motion Pursuant to Civil

Rule 60(A), and for Reconsideration with Respect to the Court's Entries of January 17,

2018, February 9, 2018, and February 26, 2018, filed April 23, 2018. The trial court

suggested that while Plaintiff disagrees with the court's rulings on the issues, Plaintiff

could address the court's rulings by filing an amended complaint in compliance with Civil

R. 10(A). The court further suggested that Plaintiff should also consider the potential

issues of res judicata, failure to join necessary parties, and failure to file a preliminary

judicial report

{¶14} On September 7, 2018, Plaintiff filed its Second Amended Complaint.

Plaintiff received certified mail service upon Defendants Nashon D. Owens, Edward

Spiers, Buckeye Building Solutions LTD, and Bonita Spears on September 15-17, 2018.

Plaintiff performed ordinary mail service upon Defendant Decquelyn Owens on

November 20, 2018.

{¶15} On September 14, 2018, Plaintiff, through counsel, and Defendants

Edward Spiers and Buckeye Building Solutions, LTD, both pro se, filed a Stipulated

Entry of Settlement as to Defendants Edward Spiers and Buckeye Building Solutions

LTD, only. Franklin County, Case No. 19AP000274 5

{¶16} On October 18, 2018, Plaintiff filed a motion for default seeking to have

the averments of the Complaint admitted as true as to Nashon Owens and Back to Life

Home Improvements, LLC.

{¶17} On December 3, 2018, Plaintiff filed a bench brief as to the issue of res

judicata.

{¶18} On December 21, 2018, Plaintiff filed a motion for default as to Decquelyn

Owens.

{¶19} By Decision and Entry filed March 28, 2019, the trial court denied the

motions for default and dismissed Plaintiff’s Complaint and all claims therein.

{¶20} Appellant now appeals to this Court, assigning the following errors for

review:

ASSIGNMENTS OF ERROR

{¶21} “I. THE TRIAL COURT ERRED IN SUA SPONTE DISMISSING

PLAINTIFF-APPELLANT'S COMPLAINT WITHOUT NOTICE AND BY (I) APPLYING

R.C. §2715.01(E) TO PLAINTIFF-APPELLANT'S CREDITOR'S BILL ACTION AS

OPPOSED TO R.C. §2333.01, OR EQUITY, AND (II) REQUIRING PLAINTIFF-

APPELLANT'S CLAIMS TO MEET A HEIGHTENED PLEADING STANDARD BEYOND

CIV.R. 8(A).

{¶22} “II. THE TRIAL COURT ERRED IN FAILING TO GRANT DEFAULT

JUDGMENT TO PLAINTIFF-APPELLANT, INCLUDING ITS INITIAL DENIAL BASED

UPON A FINDING THAT USING "ET AL." IN THE CASE CAPTION FOR AN

AMENDED COMPLAINT INSTEAD OF RELISTING PREVIOUSLY NAMED, SERVED, Franklin County, Case No. 19AP000274 6

AND DEFAULTING DEFENDANTS ACTED AS A DISMISSAL OF THOSE

DEFENDANTS PURSUANT TO CIV.R. 10(A).

{¶23} “III. THE TRIAL COURT ERRED IN FINDING THAT PLAINTIFF-

APPELLANT'S CLAIM RELATED TO THE AWARD OF EXEMPLARY DAMAGES WAS

BARRED BY RES JUDICATA.”

II.

{¶24} For Ease of discussion, we shall address Plaintiff’s assignments of error

out of order.

{¶25} In its second assignment of error, Appellant argues that the trial court

erred in denying its motions for default judgment. We disagree.

{¶26} This Court will not reverse a trial court's decision on a default judgment

absent an abuse of discretion. Huffer v. Cicero (1995), 107 Ohio App.3d 65, 74, 667

N.E.2d 1031; King v. Stump, (Dec. 28, 1998), Ross App. No. 97CA2349, unreported. An

abuse of discretion involves more than merely an error in judgment; it means that the

trial court has acted in an unreasonable, unconscionable, or arbitrary manner. Franklin

Cty. Sheriff's Dept. v. State Emp. Relations Bd. (1992), 63 Ohio St.3d 498, 506, 589

N.E.2d 24.

{¶27} Here, while Appellant’s initial Complaint listed Nashon Owens as a

defendant, the January 9, 2018, Amended Complaint did not include him in the case

caption. The trial court therefore found Appellant’s Motion to Have Averments in

Creditor's Bill Complaint Deemed Admitted as True Pursuant to Civ.R. 8(D) and for

Default Judgment Pursuant to Civ.R. 55, as well as Nashon Owen’s motion to dismiss,

to be moot. Franklin County, Case No. 19AP000274 7

{¶28} An amended complaint supersedes and replaces the original complaint.

Abram & Tracy, Inc. v. Smith (1993), 88 Ohio App.3d 253, 263, 623 N.E.2d 704, 710–

711; Steiner v. Steiner (1993), 85 Ohio App.3d 513, 519, 620 N.E.2d 152, 156. See,

also, Hidey v. Ohio State Hwy. Patrol (1996), 116 Ohio App.3d 744, 689 N.E.2d 89. As

the Ohio Supreme Court stated in Wrinkle v. Trabert, 174 Ohio St. 233, 188 N.E.2d 587

(1963), paragraph three of the syllabus, “[t]he substitution of an amended petition for an

earlier one ordinarily constitutes an abandonment of the earlier pleading and a reliance

upon the amended one. (Paragraph one of the syllabus in Grimm v. Modest, 135 Ohio

St. 275, 20 N.E.2d 527, approved and followed.)” “The earlier pleading becomes functus

officio.” State ex rel. Talaba v. Moreland, 132 Ohio St. 71, 75, 5 N.E.2d 159 (1936). As

an initial matter, we note that the assertions made in Appellant's original complaint are

no longer viable, Appellant having replaced his original complaint with an amended

complaint. The substitution of an amended complaint for an earlier one ordinarily

constitutes an abandonment of the earlier pleading and a reliance upon the amended

one. Hidey v. Ohio State Hwy. Patrol (1996), 116 Ohio App.3d 744; Ross v. Jones

(June 30, 1988), Butler App. No. CA87-10-135, unreported, citing Wrinkle v. Trabert

(1963), 174 Ohio St. 233, paragraph three of the syllabus; Grimm v. Modest (1939), 135

Ohio St. 275.

{¶29} Therefore, Nashon Owens was not a party to this case once Appellant

filed its amended complaint. A trial court may not grant default judgment against a

defendant when the amended complaint fails to name that defendant, even if that

defendant is named in the original complaint. Ross v. Jones (June 30, 1988), Butler Franklin County, Case No. 19AP000274 8

App. No. CA87-10-135, unreported; Hall v. Mainous, 4th Dist. Scioto No. 99CA2680,

2000 WL 1206609.

{¶30} Therefore, the trial court did not abuse its discretion when it denied default

judgment against Owens.

{¶31} Appellant’s second assignment of error is overruled.

III.

{¶32} In its third assignment of error, Appellant argues the trial court erred in

finding his exemplary damages claims were barred by the doctrine of res judicata. We

disagree.

{¶33} Upon review, we find that while the trial court in its decision did find

Plaintiff’s claims seeking the remainder of the treble/exemplary damages awarded by

the municipal court were barred by res judicata, it also denied and dismissed said

claims for failure to state a claim upon which relief can be granted. (See Decision and

Entry, pages 4-5).

{¶34} As stated by the trial court, Plaintiff in this matter knew the amount of

damages it was seeking against Nashon Owen for unpaid legal fees when it made the

decision to file its complaint and litigate its claims in municipal court. Plaintiff was aware

of the jurisdictional limits of the municipal court when it made such decision. Further, we

find that the municipal court only awarded $4,724.79 in exemplary damages as is

reflected in its Conclusions of Law (iii) wherein it stated “…given the jurisdictional limit of

this court the total award of exemplary damages is limited to $4,724.79.” (See

Magistrate’s Decision, page 2). Franklin County, Case No. 19AP000274 9

{¶35} As such, we find that the trial court was correct in finding that Plaintiff had

failed to set forth any claims upon which relief can be granted.

{¶36} Appellant’s third assignment of error is overruled.

I.

{¶37} In its first assignment of error, Appellant argues that the trial court erred in

dismissing its Complaint. We disagree.

{¶38} Appellant herein argues that the trial court erred in sua sponte dismissing

his Complaint without first providing it notice and an opportunity to respond.

{¶39} “In general, a court may dismiss a complaint on its own motion pursuant to

Civ.R. 12(B)(6) only if the parties are given notice of the court's intention to dismiss and

an opportunity to respond.” State ex rel. Edwards v. Toledo City School Dist. Bd. of

Edn., 72 Ohio St.3d 106, 108, 647 N.E.2d 799 (1995).

{¶40} However, courts have recognized an exception to the rule requiring notice

prior to dismissal when the complaint is frivolous or the claimant obviously cannot

prevail on the facts alleged in the complaint. State ex rel. Edwards, 72 Ohio St.3d 106,

108, 647 N .E.2d 799 (1995). “Sua sponte dismissal of a case on the merits without

[prior] notice is appropriate only if the complaint is frivolous or the claimant ‘obviously

cannot prevail’ on the facts alleged in the complaint.” State ex rel. Williams v. Trim, 145

Ohio St.3d 204, 2015–Ohio–3372, 48 N.E.3d 501, ¶11, citing State ex rel. Cincinnati

Enquirer v. Ronan, 124 Ohio St.3d 17, 2009–Ohio–5947, 918 N.E.2d 515, ¶3, quoting

State ex rel. Scott v. Cleveland, 112 Ohio St.3d 324, 2006–Ohio–6573, 859 N.E.2d 923,

¶14, and citing State ex rel. Duran v. Kelsey, 106 Ohio St.3d 58, 2005–Ohio–3674, 831

N.E.2d 430, ¶7. Franklin County, Case No. 19AP000274 10

{¶41} As set forth above, we have already found that Appellant cannot prevail

on the facts alleged in the Complaint. We therefore find it was not error for the trial court

to dismiss Appellant’s complaint on its own motion.

{¶42} Appellant’s first assignment of error is overruled.

{¶43} Accordingly the judgment of the Court of Common Pleas of Franklin

County, Ohio, is affirmed.

By: Wise, John, P.J.

Baldwin, J., and

Wise, Earle, J., concur.

Sitting by Assignment of the Supreme Court of Ohio

__________________________________ HON. JOHN W. WISE

_________________________________ HON. CRAIG R. BALDWIN

_________________________________ HON. EARLE E. WISE, JR.

JWW/d 0115 [Cite as Recovery Funding, L.L.C. v. Spiers, 2020-Ohio-364.]

IN THE COURT OF APPEALS FOR FRANKLIN COUNTY, OHIO

TENTH APPELLATE DISTRICT

RECOVERY FUNDING, LLC, : Plaintiff-Appellant : : -vs- : JUDGMENT ENTRY : EDWARD F. SPIERS, et al. : : Defendants-Appellees : CASE NO. 19AP000274

For the reasons stated in our accompanying Memorandum-Opinion on file, the

judgment of the Court of Common Pleas, Franklin County, Ohio, is affirmed.

Costs assessed to Appellant.

_________________________________ HON. JOHN W. WISE