Court Opinion

ID: 4417116
Source: CourtListenerOpinion
Date Created: 2019-07-16 15:46:51.188775+00
Date Added: 2024-06-11T14:50:59.968919
License: Public Domain

[Cite as Meadows v. Jackson Ridge Rehab. & Care, 2019-Ohio-2879.]

                                      COURT OF APPEALS
                                     STARK COUNTY, OHIO
                                  FIFTH APPELLATE DISTRICT

RHONDA MEADOWS                                          JUDGES:
                                                        Hon. W. Scott Gwin, P. J.
        Plaintiff-Appellee                              Hon. John W. Wise, J.
                                                        Hon. Patricia A. Delaney, J.
-vs-
                                                        Case No. 2018 CA 00184
JACKSON RIDGE REHABILITATION
and CARE, et al.

        Defendants-Appellants                           OPINION

CHARACTER OF PROCEEDING:                            Civil Appeal from the Court of Common
                                                    Pleas, Case No. 2015 CV 02169

JUDGMENT:                                           Affirmed

DATE OF JUDGMENT ENTRY:                             July 15, 2019

APPEARANCES:

For Plaintiff-Appellee                              For Defendants-Appellants

ROBERT J. TSCHOLL                                   G. BRENDA COEY
400 South Main Street                               THE COEY LAW FIRM LLC
North Canton, Ohio 44720                            29225 Chagrin Blvd., Suite 230
                                                    Cleveland, Ohio 44122
Stark County, Case No. 2018 CA 00184                                                2

Wise, J.

      {¶1}   Defendant-appellants Jackson Ridge Rehabilitation and Care and

Providence Healthcare Management, Inc. [collectively “Appellants”] appeal the December

5, 2018, Judgment Entry of the Stark County Court of Common Pleas granting Appellee

Rhonda Meadows’ motion for attorney fees.

                         STATEMENT OF THE FACTS AND CASE

      {¶2}   The relevant facts and procedural history are as follows.

      {¶3}   Appellee Rhonda Meadows is a registered nurse. She was hired by

Appellants to be the director of nursing at Jackson Ridge Rehabilitation and Care in

September 2014. Jackson Ridge is the registered trade name of Gaslite Leasing, LLC

and Providence Healthcare Management is an affiliated management company.

      {¶4}   Meadows’ terms of employment included health care under the employer

sponsored health care plan. Meadows took advantage of that offered benefit and began

working for Appellants at Jackson Ridge on or about October 17, 2014.

      {¶5}   In May 2015, Meadows suffered an acute medical condition and required

time off for surgery. Meadows contacted Appellants’ management regarding her need for

surgery. Appellants requested that Meadows wait until the annual survey was completed

before surgery was scheduled.

      {¶6}   In mid-June 2015, Meadows medical condition became emergent and she

returned to her physician. The surgery was scheduled for June 26, 2015. Meadows

immediately conveyed to Appellants her need for surgery. Meadows claimed that she

was informed on June 25, 2015 that if she had the surgery she would be terminated from

her employment.
Stark County, Case No. 2018 CA 00184                                                   3

        {¶7}   Meadows claimed she had the surgery to relieve her pain on June 26,

2015. She later learned that not only had Appellants terminated her employment on June

25, 2015, but they had terminated her health care insurance as well, so her surgery

and hospital stay were not covered. However, Meadows contended that Appellants

continued to deduct health care premiums from her pay, which was shown on her last

pay stub on July 3, 2015.

        {¶8}   Meadows filed suit on October 16, 2015.

        {¶9}   On October 23, 2015, Jackson Ridge received service of Meadows’

Complaint.

        {¶10} Jackson Ridge failed to timely answer, and Meadows moved the trial court

for default judgment against Appellants on Friday, December 4, 2015.

        {¶11} On Monday, December 7, 2015, the trial court granted default judgment.

        {¶12} On December 11, 2015, Jackson Ridge moved the trial court for leave to

file its Answer instanter.

        {¶13} On December 15, 2015, Appellants filed a Civ.R. 60(B) Motion for Relief

from Judgment.

        {¶14} On August 25, 2016, following a hearing conducted by the Magistrate, the

trial court denied these Motions.

        {¶15} On September 9, 2016, the trial court set a Damage hearing for October 27,

2016.

        {¶16} On September 23, 2016, Appellant filed a Notice of Appeal with this Court.

See Case No. 2016 CA 00174.
Stark County, Case No. 2018 CA 00184                                                    4

      {¶17} On October 24, 2016, this Court dismissed the appeal as not a final

appealable order.

      {¶18} The trial court reset the damage hearing for December 16, 2016.

      {¶19} On December 15, 2016, Appellants filed a Motion to Dismiss for Lack of

Jurisdiction. The parties briefed the Motion and it was denied on April 26, 2017.

      {¶20} The trial court set a third damages hearing for May 18, 2017.

      {¶21} On May 18, 2017, Appellee and her counsel appeared. Appellants and their

counsel did not. The magistrate called the Appellant's attorney and learned that the

attorney had left the firm and had not updated her address with the Stark County Common

Pleas Court or with the Ohio Supreme Court. (May 18, 2017, T. at 3-4).

      {¶22} The magistrate proceeded with the hearing on May 18, 2017 and entered a

decision on June 21, 2017. The Court entered judgment for Meadows and against

Appellants in the amount of Seventy-Three Thousand Three Hundred Fifty-Seven

05/100 Dollars ($73,357.05) plus interest.

      {¶23} On June 30, 2017, Appellants filed a Motion for Stay and objections to

the magistrate's decision.

      {¶24} On July 3, 2017, Appellants filed a motion to set aside the judgment of

June 21, 2017.

      {¶25} On October 5, 2017, the trial court overruled those objections and adopted

the Magistrate’s Decision as a Final Entry.

      {¶26} Appellants appealed the trial court’s judgment entry to this Court, which

dismissed the appeal for lack of a final appealable order based on the fact that the trial

court failed to explicitly rule on the issue of attorney fees. See Case No. 2017CA00207.
Stark County, Case No. 2018 CA 00184                                                       5

       {¶27} On September 7, 2018, subsequent to the remand, Appellants filed a Motion

for Reconsideration, arguing that Appellee’s claims were completely pre-empted and

within the exclusive jurisdiction of the federal courts.

       {¶28} By Judgment Entry filed November 6, 2018, the trial court denied

Appellants’ motion for reconsideration.

       {¶29} By Magistrate’s Decision/Judgment Entry filed December 5, 2018, the trial

court granted Appellee’s motion for attorney fees, entering judgment in favor of Appellee

in the amount of Nineteen Thousand Dollars ($19,000.00).

       {¶30} Appellants now appeal, raising the following assignments of error:

                                   ASSIGNMENTS OF ERROR

       {¶31} “I. THE TRIAL COURT LACKED SUBJECT MATTER JURISDICTION TO

DECIDE PLAINTIFF-APPELLEE’S CLAIMS.

       {¶32} “II. THE TRIAL COURT ERRED IN GRANTING PLAINTIFF-APPELLEE’S

MOTION FOR DEFAULT JUDGMENT AND DENYING DEFENDANTS-APPELLANTS’

MOTION TO SET ASIDE DEFAULT JUDGMENT.

       {¶33} “III. THE TRIAL COURT ERRED IN AWARDING DAMAGES BEYOND

THOSE AUTHORIZED BY STATUTE.”

                                                  I.

       {¶34} In their first assignment of error, Appellants argue that the trial court lacked

subject matter jurisdiction to hear Appellee’s claims. We disagree.

       {¶35} Subject-matter jurisdiction is a threshold issue and must be determined prior

to the merits. Appellants assert that the trial court's interpretation of ERISA is wrong.

However, Appellants’ argument erroneously equates preemption with jurisdiction.
Stark County, Case No. 2018 CA 00184                                                        6

       {¶36} Generally, state tribunals have the authority to decide questions of federal

law, including questions of federal preemption. El Paso Natural Gas Co. v. Neztsosie

(1999), 526 U.S. 473, 486, 119 S.Ct. 1430, 143 L.Ed.2d 635, fn. 7 (“Under normal

circumstances, * * * state courts * * * can and do decide questions of federal law, and

there is no reason to think that questions of federal preemption are any different”). A state

tribunal is not deprived of jurisdiction to decide federal questions unless Congress intends

a federal forum to be the exclusive jurisdiction in an area, such as it did in the case of the

NLRB. See Internatl. Longshoremen's Assn., AFL–CIO v. Davis (1986), 476 U.S. 380,

391, 106 S.Ct. 1904, 90 L.Ed.2d 389 (holding that preemption under Garmon

extinguishes state jurisdiction). In Section 77r, however, Congress has not expressed

such an intention, and in fact, has merely designated a choice of federal law over state

law. Therefore, in this matter, preemption is unrelated to jurisdiction, and jurisdiction

remains a threshold question.

       {¶37} In the case of Cunningham v. Aultcare Corporation, 5th Dist. No. 2002–CA–

00375, 2003–Ohio–3085, this Court discussed the preemption of Ohio law by federal law.

We said:

              At issue in this case is whether, in the case sub judice, Ohio law is

       preempted by federal law with respect to the enforceability of the

       reimbursement clause in the insurance contract between appellant and

       appellees. In order to address such issue, we must first distinguish between

       complete preemption and ordinary preemption. * * * [A] plaintiff may

       generally avoid federal jurisdiction entirely by pleading solely state law

       claims. Franchise Tax Bd. of Calif. v. Constr. Laborers Vacation Trust for S.
Stark County, Case No. 2018 CA 00184                                                    7

       Cal. (1983), 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420. However, there is

       an exception to this general rule. If federal law completely preempts a

       plaintiff's state law claim, regardless of the artfulness of the pleading, a

       plaintiff cannot escape federal jurisdiction. Botsford v. Blue Cross and Blue

       Shield of Montana, Inc. (2002), 314 F.3d 390. “To preempt state-law causes

       of action completely, federal law must both: (1) conflict with state law

       (conflict preemption) and (2) provide remedies that displace state law

       remedies (displacement).” Id. at 393. While ordinary preemption is a

       defense to the application of state law and may be invoked in either federal

       or state court, in contrast, complete preemption provides a basis for federal

       jurisdiction as opposed to simply a defense. See Caterpiller, Inc. v. Williams

       (1987), 482 U.S. 386, 107 S.Ct. 2425, 96 L.Ed.2d 318. In the case of

       complete preemption, removal to federal court is proper. See Bastien v. AT

       & T Wireless Services, Inc., (2000), 205 F.3d 983. Cunningham, ¶ 15,

       emphasis sic.

       {¶38} In Richland Hospital, Inc. v. Ralyon, 33 Ohio St.3d 87, 516 N.E.2d 1236

(1987), the Ohio Supreme Court found state and federal courts have concurrent

jurisdiction to determine benefits and award attorney fees in an appropriate case, but

state courts have no jurisdiction to determine what the court termed “extracontractual

benefits”, such as punitive damages. The court also found federal courts have exclusive

jurisdiction over claims for breach of fiduciary duty.

       {¶39} In the case at bar, Meadows brought a claim under the Employee Income

Retirement Security Act of 1974 [“ERISA”], seeking reimbursement of the healthcare
Stark County, Case No. 2018 CA 00184                                                        8

costs she incurred as a result of the cancellation of her healthcare coverage and

interference with her rights to use the plan, breach of contract, and bad faith. Appellee

did not bring a breach of fiduciary duty claim. As stated above, Appellants failed to

respond to the Complaint, and the trial court entered Default Judgment.

       {¶40} In Raylon, the Ohio Supreme Court reviewed a case similar to the one at

bar. Plaintiffs received verification of medical benefits coverage from a plan trustee, and

one of the plaintiffs then received treatment requiring a forty-day stay in a hospital.

Subsequently, the insurance provider denied the plaintiffs' claim for benefits, determining

that, because the hospital lacked on-site surgical facilities, it was not a “hospital” within

the plan's definition of a covered hospital. The patient and her husband brought suit

against   the    insurance     company   for   expressly,    intentionally   and   maliciously

misrepresenting the plan coverage and asked for indemnification of the hospital and

doctor bills they had incurred, as well as punitive damages and attorney fees. The Ohio

Supreme Court cited Section 1132(e)(1), Title 29, U.S.Code distinguishing between

exclusive jurisdiction of federal courts and concurrent jurisdiction between state and

federal courts. It provides:

                (e)(1) Except for actions under subsection (a)(1)(B) of this section,

       the district courts of the United States shall have exclusive jurisdiction of

       civil actions under this subchapter brought by the Secretary or by a

       participant, beneficiary, or fiduciary. State courts of competent jurisdiction

       and district courts of the United States shall have concurrent jurisdiction of

       actions under subsection (a)(1)(B) of this section.
Stark County, Case No. 2018 CA 00184                                                          9

              Subsection (a)(1)(B) provides a participant may bring a civil action

       “to recover benefits due to him under the terms of his plan, to enforce his

       rights under the terms of the plan, or to clarify his rights to future benefits

       under the terms of the plan.”

       {¶41} The Supreme Court interpreted the above language to mean the common

pleas court had concurrent jurisdiction over the claims for denial of benefits and for

attorney fees, but ERISA vested exclusive jurisdiction to federal courts for punitive

damages. The court vacated the award of punitive damages and remanded the remainder

of the case to the trial court because it had applied Ohio state law instead of ERISA. It

did not order the trial court to dismiss the action for lack of jurisdiction, even though it

appears there were no state-law claims in the case.

       {¶42} We have reviewed the complaint and find it does not appear beyond doubt

that appellee can prove no set of facts warranting a recovery under both state law and

federal law. We further find the trial court has concurrent jurisdiction with the federal courts

and can apply federal law to the ERISA claims.

       {¶43} Appellants’ first assignment of error is overruled.

                                                  II.

       {¶44} In their second assignment of error, Appellants argue the trial court erred in

denying Appellants’ Civ.R. 60(B) motion seeking relief from judgment.

       {¶45} Civ.R. 60(B) states as follows:

              (B) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered

       Evidence; Fraud; Etc. On motion and upon such terms as are just, the court

       may relieve a party or his legal representative from a final judgment, order
Stark County, Case No. 2018 CA 00184                                                    10

       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.

       {¶46} A motion for relief from judgment under Civ.R. 60(B) lies in the trial court's

sound discretion. Griffey v. Rajan, 33 Ohio St.3d 75, 514 N.E.2d 1122 (1987). In order to

find an abuse of that discretion, we must determine the trial court's decision was

unreasonable, arbitrary or unconscionable and not merely an error of law or judgment.

Blakemore v. Blakemore, 5 Ohio St.3d 217, 450 N.E.2d 1140 (1983).

       {¶47} In GTE Automatic Electric Inc. v. ARC Industries, Inc., 47 Ohio St.2d 146,

351 N.E.2d 113 (1976), paragraph two of the syllabus, the Supreme Court of Ohio held

the following:

                 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
Stark County, Case No. 2018 CA 00184                                                        11

       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.

       {¶48} Appellants, in the case sub judice, allege in their motion that they were

entitled to relief from judgment because Providence Healthcare Management timely

answered the Complaint after being served with the Summons and Complaint on

December 22, 2015, and (2) Jackson Ridge’s failure to answer was due to excusable

neglect.

       {¶49} Initially, we find that Appellee attempted service on Providence Healthcare

through its statutory agent at the registered address. Service upon a corporation may be

achieved by serving the statutory agent of the corporation. R.C. §1701.07(H); Civ.R.

4.2(F). The statutory agent may be served at the address as it “appears upon the record

in the office of the secretary of state.” R.C. §1701.07(H). If the statutory agent changes

the address from that appearing upon the record in the office of the Secretary of State,

the corporation or statutory agent “shall forthwith file” the new address with the Secretary

of State. (Emphasis added.) R.C. §1701.07(E).

       {¶50} Further, we find that both Providence and Gaslite had actual notice in this

matter. An Affidavit filed by Appellants demonstrates that Gaslite informed Providence of

the lawsuit prior to the Answer date, however, Providence failed to file a timely answer.
Stark County, Case No. 2018 CA 00184                                                        12

       {¶51} In the instant case, Appellee served Gaslite Leasing, LLC with a copy of the

Complaint on October 23, 2015. Appellee served Jackson Ridge as a registered trade

name of Gaslite Leasing, LLC.

       {¶52} R.C. §1329.10(C) provides that “[a]n action may be commenced or

maintained against the user of a trade name or fictitious name whether or not the name

has been registered or reported in compliance with R.C. §1329.01 of the Revised Code.”

       {¶53} R.C. §1309.01(A)(2) defines a “fictitious name” as a “name used in business

or trade that is fictitious and that the user has not registered or is not entitled to register

as a trade name.”

       {¶54} The purpose of R.C. §1329.10 is to encourage the registration and reporting

of fictitious names with the state. Family Med. Found., Inc. v. Bright, 96 Ohio St.3d 183,

2002-Ohio-4034, 772 N.E.2d 1177, ¶ 10. Thus, the Ohio Supreme Court held in Family

Med. Found. that “we believe that the General Assembly intended for R.C. 1329.10(C) to

allow suit to be brought against a fictitious party named only by its fictitious name.” Id. It

stated that it agreed with the statement that a defendant should not be allowed “to profit

by the confusion resulting from its having done business under a fictitious name.” Id. at ¶

11, 772 N.E.2d 1177, quoting Zinn v. Pine Haven, Inc., 5th Dist. Tuscarawas No. 1578,

1982 Ohio App. LEXIS 14133, *4, 1982 WL 11268 (Aug. 12, 1982).

       {¶55} Appellants specifically argue the trial court erred in finding no excusable

neglect. Appellants argue that they forwarded the Complaint to their legal counsel, and

due to a miscommunication they were under the mistaken belief that counsel had filed an

answer.
Stark County, Case No. 2018 CA 00184                                                        13

       {¶56} To determine whether neglect is “excusable” under Civ.R. 60(B)(1), a court

must consider all the surrounding facts and circumstances. Rose Chevrolet, Inc. v.

Adams, 36 Ohio St.3d 17, 520 N.E.2d 564 (1988). Excusable neglect has been defined

as some action “not in consequence of the party's own carelessness, inattention, or willful

disregard of the process of the court, but in consequence of some unexpected or

unavoidable hindrance or accident.” Maggiore v. Barensfeld, 5th Dist. Stark Nos.

2011CA00180, 2012-Ohio-2909, 2012 WL 2415184.

       {¶57} It is well-settled that mere carelessness on a litigant's part, or on the part of

his or her attorney, is not sufficient to rise to the level of mistake, inadvertence, surprise,

or excusable neglect. Muskingum Watershed Conservatory District v. Kellar, 5th Dist.

Tuscarawas No. 2011AP020009, 2011-Ohio-6889, 2011 WL 6949234; Blaney v.

Kerrigan, 5th Dist. Fairfield No. 12–CA–86, 1986 WL 8646 (Aug. 4, 1986). “Excusable

neglect is not present if the party seeking relief could have prevented the circumstances

from occurring.” Maggiore v. Barensfeld, 5th Dist. Stark Nos. 2011CA00180,

2011CA00230, 2012-Ohio-2909, 2012 WL 2415184; Stevens v. Stevens, 5th Dist.

Fairfield No. 16-CA-17, 2016-Ohio-7925.

       {¶58} Based on the foregoing, we find that the trial court did not err in denying

appellants’ 60(B) motion for relief for judgment.

       {¶59} Appellants’ second assignment of error is overruled.

                                                 III.

       {¶60} In their third assignment of error, Appellants argue the trial court erred in

awarding damages beyond those authorized by statute. We disagree.
Stark County, Case No. 2018 CA 00184                                                       14

       {¶61} Appellants herein argue that the only damages available under ERISA were

damages for back pay and medical bills. Appellants maintain that the damages awarded

by the trial court for compensatory damages, full medical bills, front pay/diminution of

wages, and punitive damages were improper.

       {¶62} Initially we note that Appellants failed to answer the Complaint in this matter

and failed to show and/or defend at the damages hearing. The place for Appellants to

contest whether, and to what extent, they are liable to Appellee in damages is in the court

where the civil action was filed.

       {¶63} We further find Appellants did not file objections to the Magistrate’s Decision

on Attorney fees as required by Civ.R. 53. We therefore agree with Appellee that

Appellants have waived their right to appeal the magistrate's decision and the trial court's

adoption of the same.

       {¶64} As we explained in Lemon v. Lemon, 5th Dist. Stark No. 2010CA00319,

2011–Ohio–1878 ¶ 63–64:

       {¶65} Civ.R. 53(D)(3)(b)(iv) provides that “[a] party shall not assign as error on

appeal the court's adoption of any factual findings or legal conclusion * * * unless the party

has objected to that finding or conclusion * * *.” See, e.g., Stamatakis v. Robinson

(January 27, 1997), Stark App.No. 96CA303; Kademenos v. Mercedes–Benz of North

America, Inc. (March 3, 1999), Stark App. No. 98CA50.

       {¶66} Civ.R. 53(D)(3)(b)(iv) further provides: “Except for a claim of plain error, a

party shall not assign as error on appeal the court's adoption of any factual finding or legal

conclusion, whether or not specifically designated as a finding of fact or conclusion of law
Stark County, Case No. 2018 CA 00184                                                     15

under Civ.R. 53(D)(3)(a)(ii), unless the party has objected to that finding or conclusion as

required by Civ.R. 53(D)(3)(b).”

       {¶67} However, the plain error doctrine is not favored and may be applied only in

the extremely rare case involving exceptional circumstances where error, to which no

objection was made at the trial court, seriously affects the basic fairness, integrity, or

public reputation of the judicial process, thereby challenging the legitimacy of the

underlying judicial process itself. Dorsey v. Dorsey, Fifth Dist. App.No. 2009-CA-00065,

2009-Ohio-4894; Goldfuss v. Davidson, 79 Ohio St.3d 116, 679 N.E.2d 1099, 1997-Ohio-

401, at syllabus.

       {¶68} Based upon the failure of Appellants to object to the magistrate's decision,

and our failure to find any plain error, we reject Appellants’ third assignment of error and

hereby overrule same,

       {¶69} The judgment of the Court of Common Pleas, Stark County, Ohio, is

affirmed.

By: Wise, J.

Gwin, P. J., and

Delaney, J., concur.

JWW/d 0702