[Cite as Watters Mfg. Co. v. Jem Industries, Inc., 2011-Ohio-2405.]
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION No. 95723
WATTERS MANUFACTURING CO. PLAINTIFF-APPELLEE
vs.
JEM INDUSTRIES, INC. DEFENDANT-APPELLANT
JUDGMENT: AFFIRMED
Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-702024
BEFORE: Cooney, J., Celebrezze, P.J., and Rocco, J.
RELEASED AND JOURNALIZED: May 19, 2011 2
ATTORNEYS FOR APPELLANT
Carl P. Kasunic Matthew W. Weeks Carl P. Kasunic Co., L.P.A. 4230 State Route 306 Building 1 – Suite 300 Willoughby, Ohio 44094
ATTORNEY FOR APPELLEE
Thomas C. Pavlik Novak, Robenalt & Pavlik, LLP Skylight Office Tower 1660 West 2nd Street, Suite 950 Cleveland, Ohio 44113-1419
COLLEEN CONWAY COONEY, J.:
{¶ 1} Defendant-appellant, JEM Industries, Inc. (“JEM”), appeals the
trial court’s denial of its Civ.R. 60(B) motion for relief from judgment. We
find no merit to the appeal and affirm.
{¶ 2} JEM is a refrigerator manufacturer. Beginning in the
mid-1990’s, JEM began a business relationship with plaintiff-appellee,
Watters Manufacturing Co. (“Watters”), in which Watters supplied JEM with
various parts for its refrigeration products. The relationship ended in 2009
when the parties could not agree on the exact balance due to Watters on
outstanding invoices. Watters hired a collection agency and received three 3
payments from JEM early in 2009 totaling $7,500. However, in August
2009, Watters filed suit to collect the remaining debt, which it alleged totaled
$87,615.56.
{¶ 3} JEM disputed the amount of the alleged debt, and the parties
engaged in settlement negotiations. JEM indicated there were discrepancies
in its account dating back to 1999 for uncredited returned merchandise, bills
for parts that were never delivered, and other billing errors. JEM submitted
numerous documents to Watters’ counsel documenting the discrepancies.
Watters claims it matched JEM’s documents to its own records and credited
JEM’s account where appropriate.
{¶ 4} Meanwhile, Watters’ case was pending in the common pleas
court. JEM never filed an answer, and Watters filed a motion for default.
The court scheduled a default hearing, which was continued several times at
Watters’ request because the parties were attempting to reach a settlement.
Ultimately, Watters obtained a default judgment against JEM in January
2010 in the amount of $75,025.31, which Watters claimed represented the
unpaid balance after appropriate credits were made.
{¶ 5} On July 23, 2010, JEM filed a motion for relief from judgment
pursuant to Civ.R. 60(B)(1), (3), (4), and (5). JEM claimed it had a
meritorious defense to Watters’ claim because it was entitled to a setoff for 4
merchandise JEM never received, and because it had paid the entire balance
owed to Watters. The trial court denied the motion without a hearing. In
its journal entry, the court explained:
“The claim of a meritorious defense of setoff or accord and satisfaction is not credible, especially considering the plaintiff sought a default judgment in an amount $12,590.25 less than the amount of the complaint. That supports the plaintiff’s assertion that all of the defendant’s claimed setoffs and credits were taken into account when calculating the damages requested in the default motion.
* * *
“The defendant’s neglect of the lawsuit has not been shown to be excusable.
“There is no newly discovered evidence.
“The plaintiff did not engage in fraud, misrepresentation or other misconduct. The evidence supports a conclusion that the plaintiff patiently cooperated with the defendant to get right the amount claimed as damages.”
{¶ 6} JEM now appeals, raising two assignments of error. In the first
assignment of error, JEM argues the trial court abused its discretion by
denying Watters’ motion for relief from judgment. In the second assignment
of error, JEM argues the trial court erred in denying its motion for relief from
judgment without holding an evidentiary hearing.
{¶ 7} JEM contends the trial court should have granted it relief from judgment pursuant to Civ.R. 60(B)(1), (3), (4), and (5). Civ.R. 60(B)(1), (3), (4), and (5) provide that the court may relieve a party from judgment for the following reasons: 5
{¶ 8} “(1) mistake, inadvertence, surprise or excusable neglect; (3) fraud * * *,
misrepresentation or other misconduct of an adverse party; (4) the judgment has been satisfied,
released or discharged, * * *; or (5) any other reason justifying relief from the judgment.”
{¶ 9} To prevail on a motion for relief from judgment under Civ.R. 60(B), the movant
must demonstrate 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 Elec., Inc.
v. ARC Industries, Inc. (1976), 47 Ohio St.2d 146, 351 N.E.2d 113, paragraph two of the
syllabus. These requirements are independent and written in the conjunctive; therefore, all
three must be clearly established in order to be entitled to relief. Id. at 151, 351 N.E.2d 1122.
{¶ 10} The trial court denied JEM’s motion because JEM failed to establish excusable
neglect, failed to raise a meritorious defense, and because the motion was not timely. Any
one of these findings would preclude relief from judgment under Civ.R. 60(B). State ex rel.
Richard v. Seidner, 76 Ohio St.3d 149, 151, 1996-Ohio-54, 666 N.E.2d 1134. Because they
are dispositive, we will first address JEM’s excusable neglect and timeliness arguments.
{¶ 11} JEM argues its neglect of the pending lawsuit against it was excusable because
Watters mislead JEM into believing it would not prosecute its case while the parties were
negotiating. JEM also claims that Watters’ representation that it would meet with JEM to
further negotiate their dispute excused its attendance at scheduled court appearances. 6
{¶ 12} What constitutes “excusable neglect” depends on the facts and circumstances of
each case. The concept of “excusable neglect” is a remedial rule and is to be liberally
construed, while bearing in mind that Civ.R. 60(B) constitutes an attempt to “strike a proper
balance between the conflicting principles that litigation must be brought to an end and justice
should be done.” Svoboda v. Brunswick (1983), 6 Ohio St.3d 348, 351, 453 N.E.2d 648,
quoting Colley v. Bazell (1980), 64 Ohio St.2d 243, 248, 416 N.E.2d 605. Also, GTE states
that neglect is not “excusable” when it constitutes “a complete disregard for the judicial
system and the rights of the appellee.” GTE at 153.
{¶ 13} The principle of excusable neglect is closely related to the timeliness element of
Civ.R. 60(B). Whether a Civ.R. 60(B) motion is filed within a reasonable time also depends
on the facts and circumstances of the particular case. Colley at 249-250, 416 N.E.2d 605.
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[Cite as Watters Mfg. Co. v. Jem Industries, Inc., 2011-Ohio-2405.]
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION No. 95723
WATTERS MANUFACTURING CO. PLAINTIFF-APPELLEE
vs.
JEM INDUSTRIES, INC. DEFENDANT-APPELLANT
JUDGMENT: AFFIRMED
Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-702024
BEFORE: Cooney, J., Celebrezze, P.J., and Rocco, J.
RELEASED AND JOURNALIZED: May 19, 2011 2
ATTORNEYS FOR APPELLANT
Carl P. Kasunic Matthew W. Weeks Carl P. Kasunic Co., L.P.A. 4230 State Route 306 Building 1 – Suite 300 Willoughby, Ohio 44094
ATTORNEY FOR APPELLEE
Thomas C. Pavlik Novak, Robenalt & Pavlik, LLP Skylight Office Tower 1660 West 2nd Street, Suite 950 Cleveland, Ohio 44113-1419
COLLEEN CONWAY COONEY, J.:
{¶ 1} Defendant-appellant, JEM Industries, Inc. (“JEM”), appeals the
trial court’s denial of its Civ.R. 60(B) motion for relief from judgment. We
find no merit to the appeal and affirm.
{¶ 2} JEM is a refrigerator manufacturer. Beginning in the
mid-1990’s, JEM began a business relationship with plaintiff-appellee,
Watters Manufacturing Co. (“Watters”), in which Watters supplied JEM with
various parts for its refrigeration products. The relationship ended in 2009
when the parties could not agree on the exact balance due to Watters on
outstanding invoices. Watters hired a collection agency and received three 3
payments from JEM early in 2009 totaling $7,500. However, in August
2009, Watters filed suit to collect the remaining debt, which it alleged totaled
$87,615.56.
{¶ 3} JEM disputed the amount of the alleged debt, and the parties
engaged in settlement negotiations. JEM indicated there were discrepancies
in its account dating back to 1999 for uncredited returned merchandise, bills
for parts that were never delivered, and other billing errors. JEM submitted
numerous documents to Watters’ counsel documenting the discrepancies.
Watters claims it matched JEM’s documents to its own records and credited
JEM’s account where appropriate.
{¶ 4} Meanwhile, Watters’ case was pending in the common pleas
court. JEM never filed an answer, and Watters filed a motion for default.
The court scheduled a default hearing, which was continued several times at
Watters’ request because the parties were attempting to reach a settlement.
Ultimately, Watters obtained a default judgment against JEM in January
2010 in the amount of $75,025.31, which Watters claimed represented the
unpaid balance after appropriate credits were made.
{¶ 5} On July 23, 2010, JEM filed a motion for relief from judgment
pursuant to Civ.R. 60(B)(1), (3), (4), and (5). JEM claimed it had a
meritorious defense to Watters’ claim because it was entitled to a setoff for 4
merchandise JEM never received, and because it had paid the entire balance
owed to Watters. The trial court denied the motion without a hearing. In
its journal entry, the court explained:
“The claim of a meritorious defense of setoff or accord and satisfaction is not credible, especially considering the plaintiff sought a default judgment in an amount $12,590.25 less than the amount of the complaint. That supports the plaintiff’s assertion that all of the defendant’s claimed setoffs and credits were taken into account when calculating the damages requested in the default motion.
* * *
“The defendant’s neglect of the lawsuit has not been shown to be excusable.
“There is no newly discovered evidence.
“The plaintiff did not engage in fraud, misrepresentation or other misconduct. The evidence supports a conclusion that the plaintiff patiently cooperated with the defendant to get right the amount claimed as damages.”
{¶ 6} JEM now appeals, raising two assignments of error. In the first
assignment of error, JEM argues the trial court abused its discretion by
denying Watters’ motion for relief from judgment. In the second assignment
of error, JEM argues the trial court erred in denying its motion for relief from
judgment without holding an evidentiary hearing.
{¶ 7} JEM contends the trial court should have granted it relief from judgment pursuant to Civ.R. 60(B)(1), (3), (4), and (5). Civ.R. 60(B)(1), (3), (4), and (5) provide that the court may relieve a party from judgment for the following reasons: 5
{¶ 8} “(1) mistake, inadvertence, surprise or excusable neglect; (3) fraud * * *,
misrepresentation or other misconduct of an adverse party; (4) the judgment has been satisfied,
released or discharged, * * *; or (5) any other reason justifying relief from the judgment.”
{¶ 9} To prevail on a motion for relief from judgment under Civ.R. 60(B), the movant
must demonstrate 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 Elec., Inc.
v. ARC Industries, Inc. (1976), 47 Ohio St.2d 146, 351 N.E.2d 113, paragraph two of the
syllabus. These requirements are independent and written in the conjunctive; therefore, all
three must be clearly established in order to be entitled to relief. Id. at 151, 351 N.E.2d 1122.
{¶ 10} The trial court denied JEM’s motion because JEM failed to establish excusable
neglect, failed to raise a meritorious defense, and because the motion was not timely. Any
one of these findings would preclude relief from judgment under Civ.R. 60(B). State ex rel.
Richard v. Seidner, 76 Ohio St.3d 149, 151, 1996-Ohio-54, 666 N.E.2d 1134. Because they
are dispositive, we will first address JEM’s excusable neglect and timeliness arguments.
{¶ 11} JEM argues its neglect of the pending lawsuit against it was excusable because
Watters mislead JEM into believing it would not prosecute its case while the parties were
negotiating. JEM also claims that Watters’ representation that it would meet with JEM to
further negotiate their dispute excused its attendance at scheduled court appearances. 6
{¶ 12} What constitutes “excusable neglect” depends on the facts and circumstances of
each case. The concept of “excusable neglect” is a remedial rule and is to be liberally
construed, while bearing in mind that Civ.R. 60(B) constitutes an attempt to “strike a proper
balance between the conflicting principles that litigation must be brought to an end and justice
should be done.” Svoboda v. Brunswick (1983), 6 Ohio St.3d 348, 351, 453 N.E.2d 648,
quoting Colley v. Bazell (1980), 64 Ohio St.2d 243, 248, 416 N.E.2d 605. Also, GTE states
that neglect is not “excusable” when it constitutes “a complete disregard for the judicial
system and the rights of the appellee.” GTE at 153.
{¶ 13} The principle of excusable neglect is closely related to the timeliness element of
Civ.R. 60(B). Whether a Civ.R. 60(B) motion is filed within a reasonable time also depends
on the facts and circumstances of the particular case. Colley at 249-250, 416 N.E.2d 605.
The movant bears the burden of submitting factual material that demonstrates the timeliness of
the motion. Adomeit v. Baltimore (1974), 39 Ohio App.2d 97, 103, 316 N.E.2d 469.
{¶ 14} A motion to vacate a default judgment, which is filed nearly one year after
actual notice of the action and more than six months after default judgment was entered, does
not, on its face, satisfy the reasonable time requirement. When a movant is aware that there
are grounds for relief and delays filing the motion, the movant must provide a reasonable
explanation for the delay. Kaczur v. Decara, Cuyahoga App. No. 67546, 1995-Ohio-3038
(Civ.R. 60(B) motion untimely filed when movant offered no reasonable explanation for a 7
nine-month delay in filing the motion); Sec. Fed. Sav. & Loan Assn. of Cleveland v. Keyes
(June 29, 1990), Geauga App. No. 89-G1524 (holding that failure to explain an 18-week delay
in filing a motion to vacate the default judgment was untimely). In the absence of any
evidence explaining the delay, the movant has failed to demonstrate the timeliness of the
motion. Mt. Olive Baptist Church v. Pipkins Paints & Home Improvement Ctr., Inc. (1979),
64 Ohio App.2d 285, 413 N.E.2d 850, paragraph two of the syllabus.
{¶ 15} JEM admits it was aware of the court’s scheduled default hearing but decided
not to attend the hearing because the parties were negotiating. JEM claims it had a
reasonable expectation that Watters would resolve the case even though Watters believed JEM
owed $75,025.31 and JEM believed it owed Watters nothing. From our view, the parties
were not close to reaching a settlement, and JEM’s willful decision not to attend the default
hearing or at least request a continuance demonstrates “a complete disregard for the judicial
{¶ 16} After Watters obtained the default judgment in January 2010, JEM waited six
months before filing its motion for relief from the default judgment. JEM’s only explanation
for the delay is that Watters mislead it into believing they would settle the case and that, in
reliance on this belief, JEM postponed hiring counsel. As previously explained, JEM’s belief
that the parties would reach a settlement was not reasonable since the parties were $75,025.31
apart. Moreover, even if we were to accept that excuse for not attending the default hearing, 8
it does not explain why JEM waited six months before filing the motion for relief from
judgment.
{¶ 17} A movant is not entitled to a hearing on a motion for relief from judgment if the
motion or supporting affidavits do not contain allegations of operative facts that would warrant
relief under Civ.R. 60(B). Hrabak v. Collins (1995), 108 Ohio App.3d 117, 121, 670 N.E.2d
281; Boster v. C & M Serv., Inc. (1994), 93 Ohio App.3d 523, 526, 639 N.E.2d 136. Having
failed to provide a reasonable explanation for the delay, we find the tripartite test set forth in
GTE for obtaining relief from judgment was not met and the trial court properly denied the
motion.
{¶ 18} Accordingly, we overrule both assignments of error.
Judgment is affirmed.
It is ordered that appellee recover of appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the
common pleas court to carry this judgment into execution. 9
A certified copy of this entry shall constitute the mandate pursuant to
Rule 27 of the Rules of Appellate Procedure.
______________________________________________ COLLEEN CONWAY COONEY, JUDGE
FRANK D. CELEBREZZE, JR., P.J., and KENNETH A. ROCCO, J., CONCUR