Yurina v. Wiser Oil Co.

2013 Ohio 4004

• Court: Ohio Court of Appeals
• Decided: September 16, 2013
• Docket: 13 CA 13
• Status: Published

Opinion

[Cite as Yurina v. Wiser Oil Co., 2013-Ohio-4004.]

COURT OF APPEALS GUERNSEY COUNTY, OHIO FIFTH APPELLATE DISTRICT

JUDGES: JOSEPH F. YURINA III, ET AL : Hon. W. Scott Gwin, P.J. : Hon. Sheila G. Farmer, J. Plaintiffs-Appellees : Hon. Patricia A. Delaney, J. : -vs- : : Case No. 13 CA 13 THE WISER OIL COMPANY : : Defendants-Appellants : OPINION

CHARACTER OF PROCEEDING: Civil appeal from the Guernsey County Court of Common Pleas, Case No. 12OG000189

JUDGMENT: Affirmed

DATE OF JUDGMENT ENTRY: September 16, 2013

APPEARANCES:

For Plaintiffs-Appellees For Defendants-Appellants

SCOTT EICKELBERGER LYLE BROWN RYAN LINN 41 South High Street, Ste 2200 DAVID TARBERT Columbus, OH 43215 WILLIAM TAYLOR 50 North Fourth Street Box 1030 Zanesville, OH 43702-1030 [Cite as Yurina v. Wiser Oil Co., 2013-Ohio-4004.]

Gwin, P.J.

{¶1} Defendant-appellants Forest Oil Corporation [“Forest”] and The Wiser Oil

Company [“Wiser”] appeal the judgments of the Guernsey County Court of Common

Pleas granting default judgments in favor of plaintiff-appellee’s Joseph F. Yurina III and

Anthony M. Yurina, co-trustees of the Yurina Family Trust dated July 18, 1990

[“Appellee”] and denying their motions for relief from judgment, for leave to file answers

instanter and for reconsideration.

Facts and Procedural History

{¶2} Appellees initiated this litigation by filing a Complaint to quiet title and to

forfeit a portion of an oil and gas lease with the Court of Common Pleas, Guernsey

County, Ohio on April 13, 2012.

{¶3} The Appellees predecessors in title Joseph Yurina, Jr. and Anna Yurina

had executed the oil and gas lease in question. The original lessee was Wiser. The

lease was dated June 22, 1967 and filed for record in the Guernsey County, Ohio,

Lease Records, Volume 55, Page 757.

{¶4} By an instrument titled Partial Assignment, Bill of Sale, and Agreement

dated April 10, 1990 Wiser assigned its interest in the lease to Defendant Oxford Oil

Company.1 This Assignment was recorded at Guernsey County, Ohio, Official Records,

Volume 3, Page 432. Oxford filed its Answer to the Complaint on April 25, 2012.

{¶5} Under the terms of the assignment of the lease, Wiser reserved to "itself

all rights below 100 feet to the base of the Clinton sand horizon and the right to produce

1 Defendant Oxford Oil Company filed its Answer to the Complaint on April 25, 2012. They are not a party to this appeal. Guernsey County, Case No. 13 CA 13 3

oil and gas from these sands..." There has never been any oil or gas produced from the

formations that Wiser reserved to itself.

{¶6} Forest acquired The Wiser Oil Company in 2004 by purchasing all issued

and outstanding capital stock. Wiser subsequently was merged into Forest effective in

November 2005. As of November 2005, Forest and Wiser effectively and legally were

one entity.

{¶7} Forest was served by certified mail on April 20, 2012. Appellees filed a

Motion for Default Judgment against Forest on June 8, 2012. The Trial Court entered

default judgment against Forest on July 12, 2012. Wiser was served by publication.

Appellees filed a Motion for Default Judgment against Wiser on September 13, 2012.

On October 24, 2012, Forest and Wiser filed their Motion for Relief from Judgment and

for Leave to File Answer.

{¶8} Forest and Wiser attached to their motion for relief from judgment the

affidavit of Cristin C. Bracken who was Senior Counsel for Litigation for Forest. In her

affidavit, Ms. Braken stated, “based upon the belief that Forest did not have an

ownership interest in the subject lease for real property, the Forest legal department

subsequently decided that Forest would not enter an appearance in the Litigation.”

Furthermore, in an email attached to attorney Bracken’s affidavit, attorney Bracken

advised senior level land managers in the Forest land department “I can just default on

this petition and a judgment will be issued terminating the lease (which is the cheapest

course for FOC), if we don’t care about this property – or even have a record of any

Wiser ownership of it...” Guernsey County, Case No. 13 CA 13 4

{¶9} The Trial Court entered a judgment denying the Motion for Relief on

January 15, 2013. The Trial Court also entered a default judgment against Wiser on

January 15, 2013. Forest and Wiser filed a "Motion for Reconsideration or, in the

Alternative, to Amend Judgment Entries to Permit Immediate Appeal,” on February 13,

2013.

{¶10} On March 18, 2013, the Trial Court denied the Motion for Reconsideration

in part, specifically with respect to the arguments addressing the Motion for Relief.

However, the Trial Court granted Forest and Wiser's request for the issuance of final

appealable orders. On March 18, 2013, the Trial Court issued the Forest Default

Judgment Entry, the Wiser Default Judgment Entry, the Entry Denying Motion for Relief,

and the Entry Denying Reconsideration.

Assignments of Error

{¶11} Forest and Wiser raise four assignments of error,

{¶12} “I. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY

DENYING FOREST OIL CORPORATION'S MOTION FOR RELIEF FROM JUDGMENT

PURSUANT TO RULE 60(B) OF THE OHIO RULES OF CIVIL PROCEDURE.

(FOREST DEFAULT JUDGMENT ENTRY; ENTRY DENYING MOTION FOR RELIEF;

ENTRY DENYING RECONSIDERATION.)

{¶13} “II. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY

ENTERING DEFAULT JUDGMENT AGAINST THE WISER OIL COMPANY. (WISER

DEFAULT JUDGMENT ENTRY; ENTRY DENYING MOTION FOR RELIEF.)

{¶14} “III. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY

DENYING THE MOTION OF FOREST OIL CORPORATION AND THE WISER OIL Guernsey County, Case No. 13 CA 13 5

COMPANY FOR LEAVE TO FILE INSTANTER THEIR ANSWER TO PLAINTIFFS-

APPELLEES' COMPLAINT PURSUANT TO RULE 6(B) OF THE OHIO RULES OF

CIVIL PROCEDURE. (WISER DEFAULT JUDGMENT ENTRY; ENTRY DENYING

MOTION FOR RELIEF; ENTRY DENYING RECONSIDERATION.)

{¶15} “IV. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY

DENYING THE MOTION OF FOREST OIL CORPORATION AND THE WISER OIL

COMPANY FOR RECONSIDERATION OF: (A) THE TRIAL COURT'S NON-FINAL

DEFAULT JUDGMENT ENTRY AS TO FOREST (FILED JULY 12, 2012); (B) THE

TRIAL COURT'S NON-FINAL DEFAULT JUDGMENT ENTRY AS TO WISER (FILED

JANUARY 15, 2013); AND (C) THE TRIAL COURT'S NON-FINAL ENTRY (FILED

JANUARY 15, 2013) DENYING FOREST'S MOTION FOR RELIEF FROM JUDGMENT

(FILED OCTOBER 24, 2012), DENYING FOREST AND WISER'S MOTION FOR

LEAVE TO FILE ANSWER INSTANTER (FILED OCTOBER 24, 2012), AND

GRANTING PLAINTIFFS-APPELLEES' MOTION FOR DEFAULT JUDGMENT

AGAINST WISER (FILED SEPTEMBER 13, 2012). (ENTRY DENYING

RECONSIDERATION.)”

I, II, III & IV

{¶16} Although Forest and Wiser purport to present four separate and distinct

assignments of error, their argument for each is combined2. The crux of this appeal is

whether the trial court abused its discretion in finding that Forest and Wiser failed to

establish excusable neglect so as to be relieved from the default judgments entered

against each of them.

2 See, App.R.16 (A)(7); App. R. 12(A)(2). Guernsey County, Case No. 13 CA 13 6

{¶17} When the defendant to an action fails to plead or otherwise defend the

action, default judgment may be granted pursuant to Civ.R. 55(A). Davis v. Immediate

Medical Services, Inc., 80 Ohio St.3d 10, 14, 684 N.E.2d 292 (1997). However, a

defendant may seek relief from default judgment pursuant to Civ.R. 60(B). The Ohio

Supreme Court set out the controlling test for Civ.R. 60(B) motions in GTE Automatic

Elec., Inc. v. Arc Industries, Inc., 47 Ohio St.2d 146, 351 N.E.2d 113(1976). The court

stated:

To prevail on a motion brought 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, and, where the grounds of relief are Civ.R.

60(B)(1), (2) or (3), not more than one year after the judgment, order or

proceeding was entered or taken. Id. at paragraph two of the syllabus.

{¶18} The decision of whether to vacate a judgment rests within the trial court's

discretion and will not be reversed absent an abuse of discretion. Doddridge v.

Fitzpatrick, 53 Ohio St.2d 9, 12, 371 N.E.2d 214(1978). An abuse of discretion is more

than simply an error of law, but rather implies that the trial court's attitude was

unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217,

219, 450 N.E.2d 1140(1983).

{¶19} In denying the motion for relief from judgment the trial court stated,

The Court finds that Wiser was properly served with the Complaint

in accordance with the Ohio Rules of Civil Procedure. In addition, the Guernsey County, Case No. 13 CA 13 7

Court finds that by Defendants' own admission Forest and Wiser are and

have been merged since 2005 and therefore Wiser would have been put

on notice of the Complaint at the same time as Forest and Forest could

have filed Answer for Wiser,

The Court finds that pursuant to Civil Rule 60(B), a Court may

relieve a party from judgment for excusable neglect. However, here, the

Court finds that Forest's actions were not excusable neglect. There was

not a disconnect or breakdown in employee protocol. Forest was noticed

in the Complaint of a possible interest in an oil and gas lease and was

directed to the exact Volume and Page where it could be found, which is

filed for record at Guernsey County, Ohio, Lease Records, Volume 55,

Page 757. Defendant then attached a copy of the oil and gas lease to their

proposed Answer Instanter. After reviewing the pleadings, the Court finds

that Forest had notice and made a decision to default for Forest and

Wiser. Therefore, Defendants cannot use Civil Rule 60(B) as a backdoor

as the Court finds there was no excusable neglect.

{¶20} The Ohio Supreme Court has yet to develop a definitive definition of

excusable neglect. However, it has described it in the negative stating, “the inaction of a

defendant is not ‘excusable neglect’ if it can be labeled as a ‘complete disregard for the

judicial system.’” Kay v. Marc Glassman, Inc., 76 Ohio St.3d 18, 20, 665 N.E.2d

1102(1996), quoting GTE Automatic Elec., Inc., 47 Ohio St.2d at 153, 351 N.E.2d 113.

The court has further explained: Guernsey County, Case No. 13 CA 13 8

A trial court does not abuse its discretion in overruling a Civ.R.

60(B)(1) motion for relief from a default judgment on the grounds of

excusable neglect, if it is evident from all of the facts and circumstances in

the case that the conduct of the defendant, combined with the conduct of

those persons whose conduct is imputable to the defendant, exhibited a

disregard for the judicial system and the rights of the plaintiff.

Griffey v. Rajan (1987), 33 Ohio St.3d 75, 78, 514 N.E.2d 1122(1987), syllabus.

{¶21} Additionally, this court has noted, “[a] denial of a Civ.R. 60(B) motion

serves justice when there has been an intentional disregard for the legal process and a

lack of good faith by the neglectful party.” Kebler v. Prudential Property & Cas. Ins. Co.,

5th Dist. Muskingum No. CT2002-0036, 2003-Ohio-2145, ¶ 49.

{¶22} Forest and Wiser argue that it has a protocol in place for evaluating and

responding to service of process. Once the Complaint was served upon the company,

in-house counsel Cristin Bracken took immediate steps to inquire as to whether Forest

had a possible ownership interest in the Lease. Forest had inherited over 1,300 leases

throughout the United States and Canada through the Wiser acquisition. Ms. Bracken

was unaware that Forest had acquired any oil and gas lease interests in Ohio, whether

through the Wiser acquisition or otherwise. She therefore enlisted the assistance of

employees in Forest's Eastern Business Unit, Land Group, to research possible

ownership in the Lease.

{¶23} Land technician Judi Dayton performed a quick, preliminary search of the

computerized database and identified thirteen (13) leases in Ohio, but did not look at

information specific to any particular lease. Based upon information she found in the Guernsey County, Case No. 13 CA 13 9

database, Ms. Dayton believed that Wiser did not have a working interest in the land

subject to the lease. Forest and Wise argue that a simple “disconnect” occurred because

Ms. Bracken understood (i.e., that Wiser had no interest in the Lease), and what Ms.

Dayton meant to convey and herself understood (i.e., that Wiser did not have a working

interest in a particular well). The investigation undertaken by the Forest employees did

not result in complete information being conveyed to the company's decision makers.

The decision not to respond to the Complaint was made based upon the impression that

Forest did not have a current interest in the Lease.

{¶24} The trial court did not abuse its discretion in finding that excusable neglect

did not exist in this case. Forest and Wiser made a conscious decision not to enter and

appearance or file an answer in the case after having been made aware that it may

have an interest in the lease and/or the property that was subject to the lease.

{¶25} In the case at bar, we agree with the trial court that the documents served

upon Forest and Wiser clearly identified that a lawsuit had been commenced, as well as

the property and the lease that were the subject of the lawsuit. According to Forest and

Wiser’s own admission, they failed to properly research their interest. To allow a

corporation to set aside a default judgment because the appropriate individuals claim

they did not correctly research the issue in accordance with approved corporate

procedure, even though the evidence demonstrates clearly the language of the

documents received indicate a formal legal proceeding had been commenced in a court

of law concerning a lease of record would be to render every corporate mistake

excusable and Civ.R. 60(B) meaningless. Guernsey County, Case No. 13 CA 13 10

{¶26} Therefore, we find that the trial court did not abuse its discretion in finding

that Wiser and Forest failed in their burden to demonstrate excusable neglect justifying

relief from judgment.

{¶27} It is well settled that the decision to grant leave to plead is well within the

discretion of the trial court. Patterson v. V & M Auto Body, 63 Ohio St.3d 573, 589

N.E.2d 1366 (1992). Additionally, because the trial court did not abuse its discretion in

finding that Wiser and Forest failed in their burden to demonstrate excusable neglect

justifying relief from judgment, the trial court did not abuse its discretion in denying

Forest and Wiser leave to file their answer instanter. To hold otherwise would be to

circumvent the requirements for relief from judgment set forth in Civ.R.60 (B).

{¶28} The Supreme Court of Ohio has held that a request for reconsideration of

a final judgment at the trial court level is a nullity, as is any judgment or final order

resulting from such a motion. State ex rel. Pendell v. Adams Cty. Bd. of Elections, 40

Ohio St.3d 58, 60, 531 N.E.2d 713, 715(1988), citing Pitts v. Dept. of Transp., 67 Ohio

St.2d 378, 381, 423 N.E.2d 1105(1981). Accordingly, the trial court did not err in

denying Forest and Wiser’s motion for reconsideration. Guernsey County, Case No. 13 CA 13 11

{¶29} Forest and Wiser’s four assignments of error are overruled in their entirety

and the judgment of the Guernsey County Court of Common Pleas is affirmed.

By Gwin, P.J.,

Farmer, J., and

Delaney, J., concur

_________________________________ HON. W. SCOTT GWIN

_________________________________ HON. SHEILA G. FARMER

_________________________________ HON. PATRICIA A. DELANEY

WSG:clw 0904 [Cite as Yurina v. Wiser Oil Co., 2013-Ohio-4004.]

IN THE COURT OF APPEALS FOR GUERNSEY COUNTY, OHIO

FIFTH APPELLATE DISTRICT

JOSEPH F. YURINA III, ET AL : : Plaintiffs-Appellees : : : -vs- : JUDGMENT ENTRY : THE WISER OIL COMPANY : : : Defendants-Appellants : CASE NO. 13 CA 13

For the reasons stated in our accompanying Memorandum-Opinion, judgment of the

Guernsey County Court of Common Pleas is affirmed. Costs to appellants.