Court Opinion

ID: 4079125
Source: CourtListenerOpinion
Date Created: 2016-10-04 04:43:08.202422+00
Date Added: 2024-06-11T14:33:15.957870
License: Public Domain

[Cite as Provenzano v. Yarnish, 2016-Ohio-7181.]
                            STATE OF OHIO, BELMONT COUNTY

                                 IN THE COURT OF APPEALS

                                       SEVENTH DISTRICT

LORI A. PROVENZANO                                 )   CASE NO. 14 BE 0042
                                                   )
        PLAINTIFF-APPELLANT                        )
                                                   )
VS.                                                )   OPINION
                                                   )
MORA YARNISH, et al.                               )
                                                   )
        DEFENDANTS-APPELLEES                       )

CHARACTER OF PROCEEDINGS:                              Civil Appeal from the Court of Common
                                                       Pleas of Belmont County, Ohio
                                                       Case No. 12 CV 0439

JUDGMENT:                                              Affirmed.

APPEARANCES:

For Plaintiff-Appellant:                               Atty. Theodore L. Tsoras
                                                       Tsoras Law Office
                                                       P.O. Box 150
                                                       54491 Lysien Road
                                                       Powhatan Point, Ohio 43942

For Defendants-Appellees:                              Atty. Douglas K. Fifner
                                                       Douglas K. Fifner Co. LPA
                                                       24441 Detroit Road #300
                                                       Westlake, Ohio 44145

JUDGES:

Hon. Cheryl L. Waite
Hon. Gene Donofrio
Hon. Carol Ann Robb
                                                       Dated: September 30, 2016
[Cite as Provenzano v. Yarnish, 2016-Ohio-7181.]
WAITE, J.

        {¶1}    Appellant Lori A. Provenzano appeals an August 26, 2014 decision of

the Belmont County Court of Common Pleas vacating its November 21, 2013 default

judgment entry against Appellee Western United Insurance Co. (“Western United”).

Two co-defendants, Mora A. Yarnish and Joseph Yarnish, were previously dismissed

and are not involved in this appeal. Appellant argues that she properly obtained

service on Western United because the company’s statutory agent accepted service

on its behalf by signing the certified mail return receipt instead of rejecting service,

thus the trial court erroneously vacated judgment. Appellant also argues that the trial

court improperly refused to strike Western United’s sur-reply brief in which it raised a

Civ.R. 60(B) argument for the first time.              For the reasons provided, Appellant’s

arguments are without merit and the judgment of the trial court is affirmed.

                                 Factual and Procedural History

        {¶2}    On October 6, 2010, Appellant was injured as a result of a car accident.

The other driver was Mora Yarnish.                 At the time of the accident, Appellant had

$50,000/$100,000 insurance limits plus UI/UIM insurance through Western United.

On September 27, 2012, Appellant filed a complaint against Western United, Yarnish,

and Yarnish’s husband. For reasons not explained in the record, five months then

elapsed. On April 1, 2013, the Clerk of Courts served the summons and complaint

on CT Corporation System (“CT”), Western United’s statutory agent. The summons

and complaint, however, named Western Union as a party defendant instead of

Western United.         The summons and complaint were subsequently returned to

Appellant along with a letter from CT stating that Western Union was not listed on
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their record as a client. Appellant filed an amended complaint on April 9, 2013, this

time accurately naming Western United as the defendant. Although the amended

complaint correctly named Western United, the envelope and summons still were

addressed to Western Union. The amended complaint was served on CT on April

17, 2013.

       {¶3}    Subsequently, CT sent Appellant’s attorney a second rejection letter

stating “n/a is not listed on our records or on the records of the State of OH.”

However, in the reference section of the letter, the following appeared: “Re: Lori A.

Provenzano, Pltf. vs. Mora A. Yarnish, et. al. including Western United Insurance

Company, etc., Dfts.”     (Emphasis added.)     (4/16/13 Rejection Letter.)    Western

United did not file an answer to the amended complaint.

       {¶4}    On November 21, 2013, Appellant voluntarily dismissed Mora Yarnish

after the parties settled for the full policy limits of $100,000. Yanrish’s husband was

later voluntarily dismissed. The trial court also granted Appellant’s motion for default

judgment against Western United. After a damages hearing, the trial court entered a

$729,796.96 judgment against Western United. Appellant’s counsel sent Western

United’s counsel a motion for pretrial interest, which then alerted Western United to

the existence of the lawsuit.

       {¶5}    On July 25, 2014, Western United filed a motion to vacate the default

judgment.     The trial court held a hearing on August 25, 2014.        The trial court

determined that Western United was not properly served and did not receive notice of

the complaint based on CT’s failure to forward the complaint to Western United. The
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trial court vacated the default judgment on this basis. The court ruled that Western

United, having now made an appearance, was a party defendant moving forward.

This timely appeal followed.     On September 22, 2014, the trial court dismissed

Appellant’s amended complaint pursuant to Civ.R. 12(B)(6). The Civ.R. 12(B)(6)

dismissal is not the subject of this appeal.

       {¶6}   Appellant raises three assignments of error on appeal. For ease of

understanding, Appellant’s assignments of error are discussed slightly out of order.

                          FIRST ASSIGNMENT OF ERROR

       THE TRIAL COURT'S FINDING THE APPELLEE WAS NOT SERVED

       WITH     THE    AMENDED        COMPLAINT     WAS     AN    ABUSE     OF

       DISCRETION.

       {¶7}   “[S]ervice of the summons and complaint required to initiate a lawsuit

must satisfy ‘[a]n elementary and fundamental requirement of due process,’ which is,

‘notice reasonably calculated, under all the circumstances, to apprise interested

parties of the pendency of the action and afford them an opportunity to present their

objections.’ ” Spotsylvania Mall Co. v. Nobahar, 7th Dist. No. 11 MA 82, 2013-Ohio-

1280, ¶ 17, citing Samson Sales, Inc. v. Honeywell, Inc., 66 Ohio St. 2d 290, 293, 421
N.E.2d 522 (1981); Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314,

70 S. Ct. 652, 94 L. Ed. 865 (1950). “[U]nless service has been properly made or the

party has otherwise waived service by appearing in the lawsuit, no judgment may be

entered against him.” Spotsylvania at ¶ 20. A trial court’s decision to vacate a
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judgment is reviewed for an abuse of discretion. Ross v. Olsavsky, 7th Dist. No. 09

MA 95, 2010-Ohio-1310, ¶12

       {¶8}   Appellant contends that the trial court abused its discretion in finding

that Western United was not properly served with the April 9, 2013 amended

complaint. Appellant argues that a presumption of proper service is created when

service is directed to the appropriate statutory agent and is “reasonably calculated” to

reach the intended party. Here, Appellant argues that service was directed to CT,

Western United’s statutory agent, where it was reasonably calculated to reach

Western United. Appellant urges that Western United has failed to produce any

evidence to rebut this presumption.       Appellant concedes that when the second

attempted service was made, the summons and envelope erroneously were

addressed to the business entity Western Union. However, Appellant argues that the

amended complaint was sufficient to place CT on notice that service was directed at

Western United. Appellant argues that this is supported by CT’s mention of Western

United in the reference section of its rejection letter. Regardless, Appellant argues

that CT failed to properly reject service and admittedly signed the certified mail return

receipt for service.

       {¶9}   In response, Western United asserts that the rebuttable presumption

only arises when service complies with the Ohio Rules of Civil Procedure, which did

not occur in this case. Western United argues that the summons and envelope for

the amended complaint was addressed to the business known as Western Union, not

to Western United. Even if the rebuttable presumption applied, here, Western United
                                                                                        -5-

argues that the evidence, which includes Mr. Wright’s testimony and the court’s

docket, is sufficient to defeat the presumption. As CT serves as the statutory agent

for hundreds of companies, Western United argues that it is impractical to place the

burden on them to search through the body of the amended complaint, which often

includes numerous defendants, in order to determine if any party to the suit is a CT

client.

          {¶10} Generally, “ ‘a trial court is without jurisdiction to render a judgment or

to make findings against a person who was not served summons, did not appear,

and was not a party in the court proceedings,’ and ‘[a] person against whom such

judgment and findings are made is entitled to have the judgment vacated.’ ” Taylor v.

Herring, 7th Dist. No. 12 CO 49, 2014-Ohio-5638, ¶ 9, quoting State ex rel. Ballard v.

O'Donnell, 50 Ohio St. 3d 182, 184, 553 N.E.2d 650 (1990).

          {¶11} Civ.R. 4.2(F) allows service “[u]pon a corporation either domestic or

foreign: by serving the agent authorized by appointment or by law to receive service

of process; or by serving the corporation at any of its usual places of business by a

method authorized under Civ.R. 4.1(A)(1); or by serving an officer or a managing or

general agent of the corporation.”

          {¶12} “[A] party who asserts that the court lacked personal jurisdiction over

the party because service of process was not proper need not establish the

requirements of Civ.R. 60(B).” Kostoglou v. D&A Trucking & Excavating, Inc., 2007-

Ohio-3399, ¶ 17, citing United Home Fed. v. Rhonehouse, 76 Ohio App. 3d 115, 123,

601 N.E.2d 138 (6th Dist.1991). This is because “[a] court has the inherent power to
                                                                                    -6-

vacate a void judgment.” Williams at *3, citing Patton v. Diemer, 35 Ohio St. 3d 68,

518 N.E.2d 941 (1988), paragraph four of the syllabus.

      {¶13} Here, service on Western United was attempted twice. It is undisputed

by both parties that the first attempt at service was improper. The dispute arises as

to whether the second attempt was proper. When the second attempt at service

reached CT, the amended complaint correctly named Western United as the

defendant. However, the summons and envelope were still incorrectly addressed to

Western Union.

      {¶14} We begin with the presumption that service is proper when it is

reasonably calculated “under all the circumstances, to apprise interested parties of

the pendency of the action and afford them an opportunity to present their

objections.” Mitchell v. Mitchell, 64 Ohio St. 2d 49, 51, 413 N.E.2d 1182 (1980), citing

Mullane, supra. In examining the circumstances here, we first look to the service

documents.    Western United argues that CT does not read the actual amended

complaint when directing service, but concedes that CT’s April 16, 2013 rejection

letter included a referenced to Western United. From this, it is reasonable to assume

that CT was at least generally aware that Appellant was attempting to serve Western

United.

      {¶15} In addition to mentioning the correct party in the rejection letter, a CT

employee signed the certified mail return receipt. Pursuant to Civ.R. 4.1(A), “service

of process via certified mail is evidenced by a return receipt signed by any person.”
                                                                                        -7-

(Emphasis deleted.) Ross, supra, ¶ 13. As such, the return receipt, here, is certainly

evidence of service on CT.

       {¶16} Finally, we look to CT’s actions in rejecting service. Pursuant to Civ.R.

4.6(C),

       If attempted service of process by United States certified or express

       mail * * * within or outside the state is refused, and the certified or

       express mail envelope * * * shows such refusal * * * the clerk shall

       forthwith notify the attorney of record or, if there is no attorney of record,

       the party at whose instance process was issued and enter the fact and

       method of notification on the appearance docket.

       {¶17} Here, CT did not mark “refused” on the envelope. Instead, CT wrote a

letter to Appellant rejecting service. Appellant admits she received this letter, but

notes that the reference section correctly mentioned Western United. The court’s

docket also reflected that CT signed the return receipt for service and did not show

refusal of service. Based on this, Appellant argues that Western United failed to

properly reject service.    However, Civ.R. 4.6(C) does not mandate that the only

means to reject service is to refuse to sign for certified mail and mark refused on the

envelope. Looking at the language of the rule, it says essentially that if “the certified

* * * envelope * * * shows such refusal” the clerk “shall” notify the party or their

counsel. It does not, however, explicitly state that this MUST be done in order to

properly reject service. While certainly such refusal is the best practice, eliminating

the confusion created here because the clerk’s office had no indication that service
                                                                                       -8-

was, in fact, refused, it does not appear that the rule limits refusal of service only to

this procedure. Arguably, the person CT has assigned to its intake desk and who

signs for mail on behalf of hundreds of CT clients probably should check a client list

before signing for certified mail, but it is not inconceivable that a clerk may not do so,

necessitating the later form letters that CT utilized to return both attempts at service

to Appellant. Because the rule does not clearly restrict refusal of service to only the

methods contained in the rule and because service was clearly directed to Western

Union, we cannot say that service on Western United was perfected. Hence, we find

no merit in Appellant’s first assignment.

       {¶18} Alternatively, the trial court additionally granted Western United’s

motion based on Civ.R. 60(B) grounds. Because this record reflects ambiguities on

the issue of service, we will address the Civ.R. 60(B) concerns.

                          THIRD ASSIGNMENT OF ERROR

       THE TRIAL COURTS DENYING APPELLANT'S MOTION TO STRIKE

       APPELLEE'S REPLY BRIEF WAS AN ABUSE OF DISCRETION.

       {¶19} Appellant claims here that Western United’s request for Civ.R. 60(B)

relief was not properly raised. Before we can address the merits of the trial court’s

decision to vacate, we must first address this threshold question.

       {¶20} Appellant contends that Western United raised its Civ.R. 60(B)

argument for the first time within its sur-reply brief. Because the argument was not

raised in Western United’s original brief, Appellant argues that the trial court

erroneously failed to strike Western United’s sur-reply brief. Appellant argues that
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this error was compounded because not only did Western United fail to raise Civ.R.

60(B) arguments in its initial brief, it did not file its sur-reply brief until 3:10 p.m. on the

Friday before the following Monday’s 8:30 a.m. scheduled hearing, leaving Appellant

with insufficient time to address this issue.

       {¶21} In response, Western United argues that it raised its Civ.R. 60(B)

arguments within its initial brief. Additionally, the trial court informed the parties that it

intended to hold a “full-scale evidentiary hearing” and wanted to hear all arguments

based on fundamental fairness, thus used its discretion in accepting the sur-reply

brief. (Appellee’s Brf., p. 27.)

       {¶22} “The determination of a motion to strike is vested within the broad

discretion of the court.” In re J.H., 7th Dist. No. 10 JE 15, 2011-Ohio-6536, ¶ 30,

citing State ex rel. Morgan v. New Lexington, 112 Ohio St. 3d 33, 2006-Ohio-6365,

857 N.E.2d 1208, ¶ 26. As such, a trial court’s decision on a motion to strike will not

be disturbed unless an abuse of that discretion is shown. Id.

       {¶23} Western United correctly notes that its Civ.R. 60(B) arguments were

raised in its original brief.      Although Western United’s primary arguments were

centered on a trial court’s inherent ability to vacate a judgment, Western United did

raise Civ.R. 60(B) arguments in its original brief. The trial court had discretion to

accept Western United’s sur-reply brief and there is nothing within this record to allow

us to find that the trial court acted unreasonably, arbitrarily, or unconscionably.

Accordingly, Appellant’s third assignment of error is without merit and is overruled.

                          SECOND ASSIGNMENT OF ERROR
                                                                                    -10-

       THE TRIAL COURT'S GRANTING OF APPELLEE'S MOTION TO

       VACATE AND SET ASIDE DEFAULT JUDGMENT WAS AN ABUSE

       OF DISCRETION.

       {¶24} Appellant contends that Western United failed to demonstrate that it

was entitled to relief under any of the Civ.R. 60(B) categories. As Civ.R. 60(B)(2),

(3), (4) are inapplicable, Western United was required to present evidence that it was

entitled to relief pursuant to Civ.R. 60(B)(1) or (B)(5). Appellant argues that Civ.R.

60(B)(1) does not apply, here, as CT’s insufficient or negligent internal policies do not

demonstrate mistake, inadvertence, surprise, or excusable neglect.             Appellant

additionally argues that Western United cannot show that it did not receive notice of

the lawsuit, thus cannot succeed under Civ.R. 60(B)(5).

       {¶25} Western United responds by arguing that it was entitled to relief

pursuant to Civ.R. 60(B)(1), (3) and (5).     As to Civ.R. 60(B)(1), Western United

argues that its statutory agent’s handling of the service is attributable to excusable

neglect.   In regard to Civ.R. 60(B)(3), Western United argues that Appellant’s

$729,000 default judgment is well above the policy limit of $50,000, thus was

fraudulently obtained.   Western United explains that Appellant settled her claims

against co-defendant Yarnish for $100,000 and Appellant was only entitled to

UM/UIM payment if Yarnish was uninsured, underinsured, or did not have liability

limits in excess of Appellant’s UM/UIM coverage. Thus, Western United argues that

Appellant is not entitled to any recovery, but even if she were, she is limited to

$50,000. Finally, Western United contends that it is entitled to relief pursuant to
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Civ.R. 60(B)(5) based on fundamental fairness. Citing Rafalski v. Oates, 17 Ohio

App.3d 65, 477 N.E.2d 1212 (8th Dist.1984), Western United argues that failure of

service has been held to be a reason for relief pursuant to Civ.R. 60(B)(5).

      {¶26} Pursuant to Civ.R. 55(B), a court is empowered to set aside a default

judgment in accordance with Civ.R. 60(B).

      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.

GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St. 2d 146, 351 N.E.2d
113, paragraph two of the syllabus. Appellant concedes that the sole issue, here, is

whether Western United is entitled to relief under one of the grounds stated in Civ.R

60(B)(1) through (5).

      {¶27} To be entitled to relief pursuant to Civ.R. 60(B)(1), Western United was

required to show mistake, inadvertence, surprise, or excusable neglect. Courts have

defined the elusive concept of excusable neglect in the negative: “neglect is not

excusable if it represents complete disregard for the judicial system.”                WFMJ

Television, Inc. v. AT&T Fed. Systems CSC, 7th Dist. No. 01 CA 69, 2002-Ohio-

3013, ¶ 17. A reviewing court must take into consideration all surrounding facts and
                                                                                 -12-

circumstances. Id. A trial court’s ruling on a Civ.R. 60(B) motion is reviewed for an

abuse of discretion. Norman v. Hanoverton Motor Cars, Inc., 7th Dist. No. 11 CO 13,

2012-Ohio-2697, ¶ 16.        “[W]hen determining whether a court’s decision is

unreasonable, we must look at whether there is a sound reasoning process that

would support the decision. Id. at ¶ 31.

      {¶28} We have already determined that Appellant did not obtain proper

service on Western United. However, it is apparent that Western United’s agent, CT,

had some idea that the suit, while addressed to Western Union, was aimed at

Western United. Based on this, Appellant believes that CT had a duty to forward her

complaint to Western United. We have previously addressed the issue of whether

the failure of an employee to forward a complaint to the proper person constitutes

excusable neglect in a series of cases.     In WFMJ, supra, the plaintiff mailed a

complaint to the defendant’s mailroom; however, the employees in that room failed to

forward the complaint to the appropriate person. After the defendant failed to file an

answer, the trial court granted the plaintiff’s motion for default judgment.    While

acknowledging that the failure of an employee to forward a complaint to the proper

person “teeters on the verge of inexcusable neglect,” we recognized that the trial

court has wide discretion in such matters and affirmed the court’s finding of

excusable neglect. Id. at ¶ 22.

      {¶29} In 2007, we again addressed the issue in Benesch, Friedlander,

Coplan, and Arnoff v. City Concrete, 7th Dist. No. 06 MA 95, 2007-Ohio-3331. In

Benesch, the plaintiff sent the complaint to the defendant’s place of business and it
                                                                                    -13-

was signed for by a temporary employee of a company that shared office space with

the defendant. The complaint was not forwarded to anyone in defendant’s company,

but the president of the defendant’s company was informed about the complaint.

The court granted the plaintiff’s motion for default judgment and, later, denied the

defendant’s Civ.R. 60(B) motion. We held that, although the failure to forward a

complaint to the proper person could be excusable neglect, the trial court did not

abuse its discretion when it held there was no excusable neglect because the

appropriate party had knowledge that the complaint had been received.

       {¶30} More recently, we addressed the issue in Norman, supra. In Norman,

the defendant’s office manager signed the return receipt for the complaint, but lost it

while rearranging office furniture. Consequently, the defendant failed to answer the

complaint. The trial court granted the plaintiff’s motion for default judgment. We

affirmed the trial court’s finding of inexcusable neglect and noted that “there is a fine

line between excusable and inexcusable neglect and the courts, including this court,

must defer to the trial court’s determination on whether the neglect is excusable given

our abuse of discretion standard of review.” Id. at ¶ 27.

       {¶31} Here, the trial court found Western United’s neglect through its agent

CT, if any, to be excusable given the confusion surrounding both service attempts.

The court further explained that it is impracticable to require a statutory agent who

represents hundreds of clients to analyze every pleading and determine to which

client service is directed when the correct name does not appear on the envelope or

the summons. As the trial court was well within its discretion in so ruling based on
                                                                                     -14-

the facts of this matter, we defer to the trial court’s decision. Accordingly, Appellant’s

second assignment of error is without merit and is overruled.

                                       Conclusion

       {¶32} While Western United’s statutory agent did not strictly follow the Civil

Rules in rejecting service, the manner in which they did reject service cannot be said

to be unlawful, as the rules do not mandate only one type of rejection. Despite the

fact that the statutory agent rejected service of the amended complaint, it is clear

from the record that the agent had some idea as to the correct party Appellant was

trying to serve. Despite this, the trial court was within its power to grant a motion to

vacate by Western United, who was never notified of the attempts at service.

Accordingly, the judgment of the trial court is affirmed.

Donofrio, P.J., concurs.

Robb, J., concurs.