Court Opinion

ID: 4364408
Source: CourtListenerOpinion
Date Created: 2019-02-04 19:54:50.449494+00
Date Added: 2024-06-11T09:39:48.434043
License: Public Domain

[Cite as SAFA, Inc. v. Reliable Credit Assn., Inc., 2019-Ohio-336.]

                                      IN THE COURT OF APPEALS

                            TWELFTH APPELLATE DISTRICT OF OHIO

                                             BUTLER COUNTY

 SAFA, INC. DBA MO AUTO SALES,                            :

        Appellant,                                        :           CASE NO. CA2018-08-157

                                                          :                OPINION
     - vs -                                                                 2/4/2019
                                                          :

 RELIABLE CREDIT ASSOCIATION,                             :
 INC., ET AL.,
                                                          :
        Appellees.

          CIVIL APPEAL FROM BUTLER COUNTY COURT OF COMMON PLEAS
                            Case No. CV2018-02-0387

Eberly McMahon Copetas LLC, Robert A. McMahon, 2321 Kemper Lane, Suite 100,
Cincinnati, Ohio 45206, for appellees

Richard Hurchanick, 110 North Third Street, Hamilton, Ohio 45011, for appellant

        S. POWELL, J.

        {¶ 1} Appellant, SAFA, Inc. dba Mo Auto Sales ("SAFA"), appeals from the decision

of the Butler County Court of Common Pleas granting a motion to dismiss filed by appellees,

Reliable Credit Association, Inc. and Morgan Groth (collectively, "Reliable Credit").1 For the

1. Pursuant to Loc.R. 6(A), we sua sponte remove this case from the accelerated calendar for purposes of
issuing this opinion.
                                                                      Butler CA2018-08-157

reasons outlined below, we affirm the common pleas court's decision.

                              Facts and Procedural History

       {¶ 2} On July 11, 2017, Reliable Credit received a default judgment against SAFA

in the Clackamas County Circuit Court, Fifth Judicial District, located in Clackamas County,

Oregon. The judgment against SAFA was in the amount of $8,845 plus interest, costs, and

attorney fees. Several months later, on October 17, 2017, Reliable Credit filed the foreign

judgment in the Butler County Court as provided for by R.C. 2923.022. Three days later,

on October 20, 2017, notice of the foreign judgment was sent to SAFA in accordance with

R.C. 2329.023. The foreign judgment was filed in the Butler County Court under Case No.

JD 2017 10 1645.

       {¶ 3} On February 16, 2018, SAFA filed a complaint against Reliable Credit in the

Butler County Common Pleas Court collaterally attacking the foreign judgment. In support,

SAFA alleged Reliable Credit had obtained the foreign judgment by engaging in fraud and

negligence through an "altered and forged contract granting jurisdiction in Oregon." SAFA

also alleged Reliable Credit had falsely claimed service of process was perfected through

a forged affidavit from the alleged process server. This, according to SAFA, resulted in

Reliable Credit obtaining the foreign judgment it then used to continue its "fraudulent

scheme" in Ohio. Rather than initially collaterally attacking the foreign judgment in the case

where the foreign judgment was filed, SAFA's complaint was filed under the separate Butler

County Case No. CV 2018 02 0387.

       {¶ 4} On April 9, 2018, Reliable Credit moved to dismiss SAFA's complaint.

Bringing its motion pursuant Civ.R. 12(B)(6), Reliable Credit argued that "[i]f SAFA wants

to challenge the underlying proceedings, it must do so in Oregon or in the case in which the

Ohio Judgment was entered." Reliable Credit also argued that "SAFA may not use this

separate legal action to challenge a valid and enforceable judgment[.]"            Therefore,

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                                                                        Butler CA2018-08-157

according to Reliable Credit, "[t]o the extent SAFA thinks that it has defenses to the

enforceability of the Oregon Judgment or the Ohio Judgment, SAFA must proceed in one

of those cases to assert its purported defenses or procedural challenges. But, unless and

until SAFA does so, it is prohibited from essentially challenging those judgments in this

separate lawsuit[.]"

       {¶ 5} On July 25, 2018, the Butler County Court issued a decision granting Reliable

Credit's motion to dismiss. In so holding, the Butler County Court stated:

              The Ohio Uniform Enforcement of Foreign Judgments Act did
              not create a separate cause of action allowing a judgment
              debtor to sue to assert defenses to a foreign judgment. It simply
              allows a judgment debtor to assert defenses to the foreign
              judgment and/or move to vacate the foreign judgment in the
              case or proceeding in which the foreign judgment is
              domesticated. The foreign judgment was not domesticated in
              this case and [SAFA's] complaint therefore fails to state a claim
              upon which relief can be granted. The complaint is dismissed
              with prejudice. [SAFA] may attempt to assert defenses or move
              to vacate the foreign judgment in the Ohio case domesticating
              the foreign judgment.

                                            Appeal

       {¶ 6} SAFA now appeals from the Butler County Court's decision granting Reliable

Credit's motion to dismiss. SAFA argues the Butler County Court erred by finding its

complaint against Reliable Credit was an impermissible collateral attack on a foreign

judgment. We find no merit to SAFA's claim.

                                     Standard of Review

       {¶ 7} Civ.R. 12(B)(6) authorizes the dismissal of a complaint if it fails to state a claim

upon which relief can be granted. Marchetti v. Blankenburg, 12th Dist. Butler No. CA2010-

09-232, 2011-Ohio-2212, ¶ 9. "In order to prevail on a Civ.R. 12(B)(6) motion, 'it must

appear beyond doubt from the complaint that the plaintiff can prove no set of facts entitling

relief.'" Id., quoting DeMell v. The Cleveland Clinic Found., 8th Dist. Cuyahoga No. 88505,

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                                                                      Butler CA2018-08-157

2007-Ohio-2924, ¶ 7. In ruling on a complaint pursuant to Civ.R. 12(B)(6), the trial court

must presume that all factual allegations in the complaint are true and draw all reasonable

inferences in favor of the nonmoving party. Mitchell v. Lawson Milk Co., 40 Ohio St. 3d 190,

192 (1988). "A trial court's order granting a motion to dismiss pursuant to Civ.R. 12(B)(6)

is subject to de novo review on appeal." BAC Home Loans Servicing, L.P. v. Kolenich, 194
Ohio App. 3d 777, 2011-Ohio-3345, ¶ 35 (12th Dist.). This court must independently review

the complaint to determine the appropriateness of the trial court's dismissal. Id.

                                          Analysis

          {¶ 8} SAFA argues the Butler County Court erred by granting Reliable Credit's

motion to dismiss because the foreign judgment was void due to a failure of service of

process and lack of personal jurisdiction. SAFA also argued the foreign judgment was void

since it was obtained by through fraud and negligence. Therefore, according to SAFA,

there exists a justiciable claim of wrongful execution of a foreign judgment. The Butler

County Court found this was an impermissible collateral attack on the foreign judgment.

We agree with the Butler County Court's decision.

          {¶ 9} Ohio's Uniform Enforcement of Foreign Judgments Act ("OUEFJA"), as

codified in R.C. 2329.021 through 2329.027, sets forth this state's obligations under the Full

Faith and Credit Clause of the United States Constitution. Emergency Physicians Ins. Co.

RRG v. Emergency Physicians Ins. Exchange, 9th Dist. Summit No. 28747, 2018-Ohio-

566, ¶ 4. "The doctrine of full faith and credit requires that the state of Ohio give to these

acts, records, and judicial proceedings of another state the same faith and credit 'as they

have by law or usage in the courts of such State * * * from which they are taken.'" Holzemer

v. Urbanski, 86 Ohio St. 3d 129, 132 (1999). This is confirmed by R.C. 2329.022, which

states:

                A copy of any foreign judgment authenticated in accordance

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                                                                       Butler CA2018-08-157

              with section 1738 of Title 28 of the United States Code, 62 Stat.
              947 (1948), may be filed with the clerk of any court of common
              pleas. The clerk shall treat the foreign judgment in the same
              manner as a judgment of a court of common pleas. A foreign
              judgment filed pursuant to this section has the same effect and
              is subject to the same procedures, defenses, and proceedings
              for reopening, vacating, or staying as a judgment of a court of
              common pleas and may be enforced or satisfied in the same
              manner as a judgment of a court of common pleas.

Therefore, as noted by the Ohio Supreme Court, "[a] judgment of a sister state's court is

subject to collateral attack in Ohio if there was no subject matter or personal jurisdiction to

render the judgment under the sister state's internal law, and under that law the judgment

is void[.]" Litsinger Sign Co. v. American Sign Co., 11 Ohio St. 2d 1 (1967), paragraph one

of the syllabus.

       {¶ 10} Assuming any issues regarding SAFA's jurisdictional challenges to the foreign

judgment have not "fully and fairly litigated in the court which rendered the original

judgment," a fact that this court must accept as true when reviewing the trial court's decision

to grant Reliable Credit's motion to dismiss, it is clear that SAFA may collaterally attack the

foreign judgment by raising these jurisdictional challenges. Dollar Bank v. Bernstein Group,

Inc., 71 Ohio App. 3d 530, 533 (10th Dist.1991); Trimax Holdings v. Larson, 10th Dist.

Franklin No. 97APE10-1355, 1998 Ohio App. LEXIS 3007, *4 (June 30, 1998); and

American Sign Co., paragraph one of the syllabus ("collateral attack is precluded in Ohio if

the defendant submitted to the jurisdiction of the sister state's court by an appearance

precluding collateral attack in such state").

       {¶ 11} But, just as the Butler County Court found, nothing within OUEFJA created a

new cause of action that would allow SAFA to assert those defenses in a separate lawsuit

in a separate case not otherwise associated with the foreign judgment. This is because, as

the language in R.C. 2932.022 provides, OUEFJA serves only as a shield to defend against

a foreign judgment rather than as a sword to attack the foreign judgment through a separate

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                                                                                   Butler CA2018-08-157

lawsuit.

        {¶ 12} This is not to say SAFA is precluded from ever collaterally attacking the

foreign judgment at issue. Far from it. Rather, as noted by the Butler County Court, SAFA

"may attempt to assert defenses or move to vacate the foreign judgment in the Ohio case

domesticating the foreign judgment." This, as noted above, would be under Case No. JD

2017 10 1645 and not under Case No. CV 2018 02 0387. That is what R.C. 2932.022

implicitly provides by stating "[a] foreign judgment filed pursuant to this section * * * is subject

to the same procedures, defenses, and proceedings for reopening, vacating, or staying as

a judgment of a court of common pleas[.]" These procedures and proceedings – for

example Civ.R. 60(B)(3) – do not include filing a separate lawsuit in a separate case other

than the case where the foreign judgment was filed.2

                                               Conclusion

        {¶ 13} Simply stated, any jurisdictional challenge to the foreign judgment must be

initiated by SAFA under the case number where the foreign judgment was filed with the

Butler County Court, not in a separate lawsuit with a separate case not otherwise associated

with the foreign judgment. Yet, even then, we note that "[o]nly foreign judgments which are

void are subject to collateral attack in Ohio. If the judgment is merely voidable, relief must

be sought in the foreign state." (Internal citation omitted.) Appel v. Berger, 149 Ohio App. 3d
486, 494 (10th Dist.2002). Therefore, because we find no error in the Butler County Court's

decision granting Reliable Credit's motion to dismiss, SAFA's single assignment of error

lacks merit and is overruled.

                                        Motions for Sanctions

2. Civ.R. 60(B)(3) provides that "[o]n motion and upon such terms as are just, the court may relieve a party or
his legal representative from a final judgment, order or proceeding for * * * fraud (whether heretofore
denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party[.]"

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                                                                      Butler CA2018-08-157

       {¶ 14} Reliable Credit moved this court to find this appeal frivolous and order SAFA

to pay reasonable expenses including attorney fees and costs as provided by App.R. 23.

In response, SAFA moved this court to find Reliable Credit engaged in frivolous conduct by

filing its motion for fees and costs. "'A frivolous appeal under App.R. 23 is essentially one

which presents no reasonable question for review.'" Madewell v. Powell, 12th Dist. Warren

No. CA2006-05-053, quoting Talbott v. Fountas, 16 Ohio App. 3d 226 (10th Dist.),

paragraph one of the syllabus. Although unsuccessful, we find the instant appeal brought

by SAFA presented a reasonable question for review; we therefore deny Reliable Credit's

motion for sanctions.

       {¶ 15} SAFA's request for sanctions against Reliable Credit is also denied. "The

purpose of [App.R. 23] is to assess attorney fees and costs against the party that brings a

frivolous appeal." (Emphasis added.) Chrisman v. Chrisman, 12th Dist. Warren No. CA99-

01-006, 2000 Ohio App. LEXIS 937, *10 (Mar. 13, 2000), citing Metcalf v. Winnen, 21 Ohio

App. 3d 174 (9th Dist.1985). Therefore, in accordance with App.R. 23, this court may award

sanctions only if this court finds "an appeal is frivolous[.]" (Emphasis added.)

       {¶ 16} Regardless, even if we were to find App.R. 23 applied to SAFA's motion, we

do not find Reliable Credit's request for sanctions frivolous. While a request for sanctions

is not warranted under most circumstances, thereby raising the potential for abuse, the plain

language found in App.R. 23 does not limit an appellant from asking this court to award

sanctions.

       {¶ 17} Judgment affirmed.

       HENDRICKSON, P.J., and RINGLAND, J., concur.

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