Case ID: ohio-st-2d_47/html/0146-01.html
Source: Caselaw Access Project
Author: {"author": "O ’Neill, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

GTE Automatic Electric, Inc., Appellee, v. ARC Industries, Inc., Appellant.
    [Cite as GTE Automatic Electric v. ARC Industries (1976), 47 Ohio St. 2d 146.]
    (No. 75-1011
    Decided July 21, 1976.)
    
      
      Messrs. Zacks, Luper é Wolinets and Mr. Frederick M. Tjwper, for appellee.
    
      Messrs. Van Reyde, Zuber & Rothgeb and Mr. Robert L. Van Reyde, for appellant.
   O ’Neill, C. J.

The question presented by this appeal is whether it was an abuse .of discretion for the trial court to grant appellant’s motion; under Civ. R. 60(B), to vacate the default judgment previously entered. Since this court finds that the trial court did abuse its discretion under the facts of this case, the judgment of the Court of Appeals must be affirmed.

Initially, however, the court must first determine that an order vacating a default judgment is a final order and, therefore, appealable. Section 3(B)(2), Article IV of the Ohio Constitution.

The general rule in the federal courts is that an order vacating a default judgment is not a final order. United States v. Agne (C. A. 3, 1947), 161 F. 2d 331; Stathatos v. Arnold Bernstein S. S. Corp. (C.A. 2, 1953), 202 F. 2d 525; 7 Moore’s Federal Practice, Paragraph 60.30[3]. See, also,. Annotation, 8 A. L. R. 3d 1272, for a summary of cases on the state level.'

Tn the second paragraph of the syllabus in Chandler & Taylor Co. v. Southern Pacific Co. (1922), 104 Ohio St. 188, 135 N. E. 620, this court held:

“An order vacating a default judgment upon motion of the defendant, filed at the saíne term, but more than three days after its rendition, is not a final determination of the rights of the parties and is not reviewable unless the court abuses its discretion in making it.”

Although Chandler has not been expressly overruled by this court, much has changed since it was decided. Insofar as Chandler may have implied that an otherwise interlocutory order can be made final and appealable by an abuse of discretion in the making of that order, that notion was laid to rest in Klein v. Bendix-Westinghouse Co. (1968), 13 Ohio St. 2d 85, 234 N. E. 2d 587. In addition, the constitutional provisions relating to the jurisdiction of the Court of Appeals, as well as the interpretations given those provisions by this court, have changed since Chandler was decided. Writing for a unanimous court in Klein, supra, Justice Paul W: Brown appropriately noted, at page 86, that “ [o]nly since Price v. McCoy Sales & Service, Inc. (1965), 2 Ohio St. 2d 131, 207 N. E. 2d 236] # * *, has Section 2505.-02, Reviséd Code, been an accurate legislative restatement of this court’s definition of a final order.” Price represents the culmination of a long and difficult series of decisions in which this court attempted to define a final order in terms of the jurisdictional provisions of the Ohio Constitution. While difficulties still remain in this area, the present case can be resolved by looking to R. C. 2505.02.

R. C. 2505.02 defines a final order as:

“An order affecting a substantial right in an action which in effect determines the action and prevents a judgment, an order affecting a substantial right made in a special proceeding or upon a summary application in an action after judgment, or an order vacating or setting aside a judgment and ordering a new trial is a final order which may be reviewed, affirmed, modified, or reversed, with or without retrial.” (Emphasis added.)

Regardless of whatever else may be said of a default judgment, it is a judgment. It is as good as any other judgment. It is a final determination of the rights of the parties. Therefore, an order of the trial court pursuant to Civ. R. 60(B), setting aside a default judgment, is clearly within the-express language of R. C. 2505..02. It is a final, appeal-able order.

Having found that the order of the trial court was a final ofdér, we may .now proceed to the question of whether the making of the-order was an'abuse of discretion.

. Civ. R. 55(B). allows, the trial court to set aside a default judgment in accordance with Civ. R. 60(B). Civ. R. 60(B) states, in part:

On motion and upon such terms as are just, the court may re-lieye a party or his legal representative from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable neglect; (2) newly, discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule- 59(B); (3) fraud (whether heretofore denominated intrinsic or extrinsic)-, misrepresentation or other misconduct of an adverse party; (4) the judgment has been satisfied, released or discharged, or a prior judgment upon which: it is based has been reversed or otherwise vacated, or it is. no longer equitable, that the judgment should have prospective application; or-(5) any other reason justifying relief from the judgment. The motion, shall be made within a reasonable time, and for reasons (1), (2) and (3) not more than one year after the judgment, order or proceeding was entered or taken. A motion under this subdivision (B) does not affect the finality of a judgment or suspend its operation.”

To.prevail on his motion 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 pártyis 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 areCiv. ,R. 60(B)(1), (2) or (3), not more than one year after the judgment, order or proceeding was entered or taken. Civ. R. 60(B); Universal Film Exchanges v. Lust (C. A. 4, 1973), 479 F. 2d 573; Adomeit v. Baltimore (1974), 39 Ohio App. 2d 97, 316 N. E. 2d 469; Brenner v. Shore (1973), 34 Ohio App. 2d 209, 297 N. E. 2d 550. The court agrees with the statement by Judge Sobeloff, in Lust, that these requirements are independent and in the conjunctive, not the disjunctive.

Appellant contends that where timely relief is sought from a default judgment and the movant has a meritorious defense, doubt, if any, should be resolved in favor of the motion to set aside the judgment so that cases may be decided on their merits. As a general statement of the proposition of law, this is, of course, true, and the courts have consistently applied the principle in appropriate cases. Tozer v. Charles A. Krause Milling Co. (C. A. 3, 1951), 189 F. 2d 242; Bridoux v. Eastern Air Lines (C. A. D. C., 1954), 214 F. 2d 207; Davis v. Parkhill-Goodloe Co. (C. A. 5, 1962), 302 F. 2d 489; Tolson v. Hodge (C. A. 4, 1969), 411 F. 2d 123; 7 Moore’s Federal Practice 232, Paragraph 60.19.

However, the cases do not imply that relief should always be granted at the request of the movant. It is a general guide, which the trial court uses as a frame of reference in deciding whether the three requirements have been met. Cf. Hamden Lodge v. Ohio Fuel Gas Co. (1934), 127 Ohio St. 469, 189 N. E. 246; Civ. R. 50(A)(4). In particular, the principle does not obviate the requirement that the movant must demonstrate • that he is entitled to relief under one of the grounds stated in Civ. 60(B) (1) through (5).

Turning to the facts of the instant appeal, it is undisputed that appellant’s motion was timely and that appellant has a meritorious defense. The sole remaining issue is whether appellant has demonstrated that it is entitled to relief under Civ. R. 60(B)(1) through (5).

The facts of this case make it clear that if relief is be granted at all, it must be under Civ. R. 60(B)(1). Although appellant urges that 60(B) (5) ' also be considered, there are no facts presented here that justify the use of the “any other reason” clause.

The trial court granted relief on the single ground that appellant’s neglect was excusable'. That-court, read Berea Bus Lines v. Seminatore, supra (17 Ohio App. 2d 31), and Antonopoulos. v. Eisner, supra (30 Ohio App. 2d 187), as. holding that the neglect of .an attorney will not be imputed to his client for the purpose of determining whether the client is entitled to relief under Civ. R. 60(B) (1). The Court, of Appeals reversed, finding that the view taken by the federal courts was the better rule.

The basis of the federal rule is most clearly set forth by the United States Supreme Court in Link v. Wabash R.R. Co. (1962), 370 U. S. 626. That court said in Link, at. pages 633-34‘:

“There is certainly no merit to the contention that dismissal of petitioner’s claim because of his counsel’s; unexcused conduct imposes an unjust penalty on the client-Petitioner voluntarily chose this attorney as his representative in the action, and he cannot now avoid the consequences of the acts or omissions of this freely selected agent. Any other notion would he wholly inconsistent with our system of representative litigation, in which each party is deemed bound by the acts of his lawyer-agent and is considered to have ‘notice of all facts, notice of which can be charged upon the attorney.’ ”

The court continued at page 634, fn. 10:

“ * * * Surely if a criminal defendant may be convicted because he did not have the presence of mind to repudiate his attorney’s conduct in the course of a trial, a civil [defendant]' may be deprived of his [defense] if he failed to see to it that his lawyer acted with dispatch in the prosecution of his lawsuit. And if an attorney’s conduct falls substantially below what is reasonable under the cireuim stances, the client’s remedy is against the. attorney in a suit for malpractice. But keeping this suit alive merely because * * * [defendant] should not be penalized for the omissions of his own attorney would be visiting the sins of * * * [defendant’s] lawyer upon the * * * [plaintiff].”

Although Link was not a Rule 60(b) decision, the federal courts have adopted its rationale in Rule 60(b) decisions. Universal Film Exchanges v. Lust, supra (479 F. 2d 573); Schwarz v. United States (C. A. 2, 1967), 384 F. 2d 833; 7 Moore’s Federal Practice 367-369, Paragraph 60.27[2].

This court agrees and adopts the general rule that the neglect of a party’s attorney will be imputed.' to the party for the purposes of Civ. R. 60(B)(1).

It should be noted that this does not preclude the possibility that in an appropriate case other factors may also be present that entitle a party to relief under other sections of Civ. R. 60(B), notwithstanding the application of the rule. For example, there might also be fraud of an adverse party involved, in addition to the movant’s inexcusable neglect, which would entitle the movant to relief under Civ. R. 60(B)(3). The grounds for relief in Civ. R. 60(B) (1) through (5) are in the disjunctive.

Applying the rule in'this case, the neglect of the attorney is imputed to appellant ARC. Taken together, their conduct reveals a complete disregard for the judicial system and the rights -of- the appellee. This is not excusable neglect. It follows that the trial court abused its discretion in granting the relief sought by appellant, and the Court of Appeals properly reversed.

For the foregoing reasons, the judgment of the Court of Appeals is affirmed.

Judgment affirmed.

Herbert, Corrigan,' Stern, Celebrezze, W. Brown and P. Brown, J j., concur.