Court Opinion

ID: 2705419
Source: CourtListenerOpinion
Date Created: 2014-08-04 22:35:52.36601+00
Date Added: 2024-06-11T12:55:32.181996
License: Public Domain

[Cite as Maxim Ents., Inc. v. Haley, 2013-Ohio-3348.]

STATE OF OHIO                    )                      IN THE COURT OF APPEALS
                                 )ss:                   NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT                 )

MAXIM ENTERPRISES, INC.                                 C.A. No.   26348

        Plaintiff

        v.                                              APPEAL FROM JUDGMENT
                                                        ENTERED IN THE
STEPHEN T. HALEY, et al.                                COURT OF COMMON PLEAS
                                                        COUNTY OF SUMMIT, OHIO
        Defendants                                      CASE No.   CV 2008-07-5093

        and

STEPHEN T. HALEY

        Appellant

        v.

STEPHEN A. MAXIM, et al.

        Third-Party Defendants

        and

BAC FIELD SERVICES CORPORATION

        Appellee

                                 DECISION AND JOURNAL ENTRY

Dated: July 31, 2013

        MOORE, Presiding Judge.

        {¶1}    Defendant Stephen T. Haley appeals from the judgment of the Summit County

Court of Common Pleas. We reverse and remand this matter for further proceedings consistent

with this opinion.
                                                2

                                                    I.

       {¶2}    Countrywide Field Services (“Countrywide”) provided real property inspections

and maintenance services to mortgage servicers.          Countrywide contracted with Maxim

Enterprises, Inc. (“Maxim”) to provide these services on properties located in Ohio. Maxim

subcontracted this work to several subcontractors. The subcontractors claimed to have provided

services to the properties, but denied having received payment from Maxim. Mr. Haley entered

into agreements with the subcontractors, wherein the subcontractors assigned their accounts

receivable and claims to Mr. Haley. Mr. Haley claimed that he contacted Maxim for payment

and that Maxim responded that it had not provided payment to the subcontractors because

Countrywide had not provided payment to Maxim.

       {¶3}    In 2008, Maxim filed a complaint against several parties, including Mr. Haley,

wherein Maxim alleged that Mr. Haley engaged in tortious interference with a business

relationship and civil conspiracy. Thereafter, Mr. Haley filed a third-party complaint against

several parties, including Countrywide. This initial third-party complaint was dismissed in 2009.

Later that year, Mr. Haley again filed a third-party complaint against several parties, including

“Bank of America fka Countrywide Field Services Corporation,” (“Bank of America”). Bank of

America failed to answer the third-party complaint, and Mr. Haley moved for default judgment,

which the trial court granted in 2010.

       {¶4}    On April 16, 2010, Mr. Haley filed a praecipe for a writ of execution against Bank

of America dba Merrill Lynch. On April 28, 2010, “BAC Field Services Corporation” (“BAC”)

filed a motion to stay execution of judgment. In its motion, BAC argued, in part, that it was also

known as “Bank of America Field Services,” but it was “improperly named in the third party

complaint * * * as ‘Bank of America f/k/a Countrywide Field Services Corporation[.]’” BAC
                                               3

requested the court to stay the proceedings to enforce the judgment pending the disposition of a

motion brought pursuant to Civ.R. 60.     BAC then filed its Civ.R. 60(B) motion, in which it

again argued, in part, that it was incorrectly named in the third-party complaint as “Bank of

America fka Countrywide Field Services Corporation[.]”         BAC maintained that “Bank of

America” was a non-entity, and that Bank of America Corporation was its parent company and

was never known as “Countrywide Field Services Corporation.”

       {¶5}   The trial court granted BAC’s motion in an order dated June 18, 2010. Mr. Haley

then attempted to appeal from the June 18, 2010 order, and we dismissed his appeal for lack of a

final appealable order. See Maxim Ents., Inc. v. Haley, 9th Dist. Summit No. 25459, 2011-Ohio-

6734. Thereafter, the trial court issued another order granting BAC’s motion to vacate the

default judgment, and including language that there was “no just reason for delay” pursuant to

Civ.R. 54(B). Mr. Haley timely filed an appeal from the trial court’s order, and he now presents

one assignment of error for our review.

                                              II.

                                 ASSIGNMENT OF ERROR

       THE TRIAL COURT ERRED IN VACATING THE DEFAULT JUDGMENT
       AGAINST BANK OF AMERICA F/K/A COUNTRYWIDE FIELD SERVICES
       AS A NON-ENTITY AS IT OPERATED AS SUCH AND IT ENTIRELY
       DISREGARDED THE JUDICIAL PROCESS.

       {¶6}   In his sole assignment of error, Mr. Haley argues that the trial court erred in

granting BAC’s motion to vacate judgment against “Bank of America fka Countrywide Field

Services Corporation.”

       {¶7}   In its order granting BAC’s motion to vacate the judgment, the trial court ruled as

follows:
                                                 4

       The [c]ourt is satisfied that [Mr.] Haley’s default judgment is against a non-entity,
       to wit: Bank of America fka Countrywide Field Services. BAC Field Services
       Corporation has now appeared in the instant litigation and appears prepared to
       defend itself against [Mr.] Haley’s claims. The Court finds in the interest of
       justice that the March 17, 2010 default judgment against Bank of America fka
       Countrywide Field Services shall be vacated and held for naught.

       {¶8}    We conclude that, due to apparent inconsistencies in the trial court’s reasoning

above, we are unable to review the trial court’s order.

       {¶9}    As set forth above, BAC moved the court to dismiss the complaint pursuant to

Civ.R. 60(B). The decision to grant a Civ.R. 60(B) motion lies within the sound discretion of the

trial court. Griffey v. Rajan, 33 Ohio St.3d 75, 77 (1987). Therefore, the standard of review on

appeal is an abuse of discretion. Kay v. Marc Glassman, Inc., 76 Ohio St.3d 18, 19-20 (1996).

The phrase “abuse of discretion” implies that the trial court was unreasonable, arbitrary or

unconscionable in its judgment. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983). When

applying the abuse of discretion standard, this Court may not substitute its judgment for that of

the trial court. Pons v. Ohio State Med. Bd., 66 Ohio St.3d 619, 621 (1993).

       {¶10} Civ.R. 60(B) states, in pertinent part:

       On 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 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.
                                                  5

         {¶11} In order to prevail on a motion for relief from judgment pursuant to Civ.R. 60(B),

the movant must demonstrate: (1) a meritorious claim or defense; (2) entitlement to relief under

one of the grounds stated in Civ.R. 60(B)(1) through (5); and (3) timeliness of the motion. GTE

Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St.2d 146 (1976), paragraph two of the

syllabus.

         {¶12} Only parties to an action may request relief from judgment pursuant to Civ.R.

60(B), as the Eleventh District has explained:

         The opening sentence of Civ.R. 60(B) states 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 * * *.” (Emphasis added.) From this
         language, it has been held that a person or entity who is neither a party nor a legal
         representative of a party may not properly obtain relief from a judgment by way
         of Civ.R. 60(B), unless that person or entity first becomes a party through
         intervention under Civ.R. 24. See Hardman v. Chiaramonte, 39 Ohio App.3d 9,
         10 (9th Dist.1987) (holding that the administrator of an estate could not file a
         Civ.R. 60(B) motion in a parentage action when he had never made a motion to
         intervene as a party in the action); Pliable Veneers, Inc. v. Omni Store Fixtures
         Corp., 6th Dist. Lucas No. L-96-145, 1997 WL 276214, *3 (May 23, 1997), fn. 5,
         (stating that a corporation could not file a Civ.R. 60(B) motion in an action in
         which it was not a party).

Nicholas v. State Farm Ins., 11th Dist. Trumbull No. 99-T-0030, 2000 WL 757355, *4 (June 9,

2000).

         {¶13} The record before us does not disclose any mechanism by which BAC appeared

as a party below.

         {¶14} In its motion, BAC claimed that its security guard had received the re-filed third-

party complaint, but, despite protocol requiring BAC employees to forward legal documents to

the company’s legal department, BAC attorneys never received the third-party complaint. BAC

claimed this constituted excusable neglect pursuant to Civ.R. 60(B)(1). BAC further set forth

that its motion was timely, and it provided several defenses which it claimed would be
                                                   6

meritorious.   BAC also set forth that the default judgment was granted against “Bank of

America,” which was a non-entity.

       {¶15} Despite BAC’s primary reliance on Civ.R. 60(B) in its motion, it does not appear

from the trial court’s judgment that the court applied the three GTE prongs in vacating the

default judgment. Instead, it appears that the trial court vacated the judgment because it was

issued against a “non-entity.” “It is well established that both plaintiff and defendant in a lawsuit

must be legal entities with the capacity to be sued.” Patterson v. V & M Auto Body, 63 Ohio

St.3d 573, 574 (1992). “If a defendant in a lawsuit is not an actual or legal entity, then any

judgment rendered against that entity is void.” Id. at 576, citing Cobble v. Farmer’s Bank, 630

Ohio St. 528 (1900). “The authority to vacate a void judgment is not derived from Civ.R. 60(B)

but rather constitutes an inherent power possessed by Ohio Courts.” Thomas v. Fick, 9th Dist.

Summit No. 19595, 2000 WL 727531, *2 (June 7, 2000), quoting Patton v. Diemer, 35 Ohio

St.3d 68 (1988), paragraph four of the syllabus.

       {¶16} Therefore, on one hand, because the trial court held that “BAC” had now

“appeared” and was prepared to defend itself against Mr. Haley’s claims, it appears that the trial

court accepted BAC’s pleadings as constituting pleadings of the named party, Bank of America.

See R.C. 1329.10(C) (“[a]n action may be commenced or maintained against the user of a trade

name or fictitious name * * *”), and Family Medicine Found., Inc. v. Bright, (“Bright I”), 96

Ohio St.3d 183, 2002-Ohio-4034 (concluding that default judgment rendered against “The

Thomas E. Rardin Family Practice Center” was enforceable against “FMF” because FMF

utilized “The Thomas E. Rardin Family Practice Center” in carrying on its business). If this is

the case, then BAC would have been required to meet all three prongs of the GTE test for the

trial court to vacate the judgment pursuant to Civ.R. 60(B).      Family Medicine Found., Inc. v.
                                                 7

Bright, 10th Dist. No. 05AP-835, 2006-Ohio-5037, ¶ 8-12 (considering FMF’s Civ.R. 60(B)

motion, which trial court denied after remand from Bright I).

       {¶17} On the other hand, it appears that the trial court vacated judgment based only

upon its finding that Bank of America was a non-entity, in accordance with the trial court’s

inherent authority to vacate a void judgment. See Thomas at *2. However, if this is the case,

then we cannot discern how BAC could have “appeared” in the instant action without having

filed a motion to intervene in accordance with Civ.R. 24, which it did not. Therefore, there is an

inconsistency in the trial court’s judgment that must be resolved to facilitate our review.

       {¶18} Because we cannot determine the basis that the trial court utilized in vacating

default judgment, we remand the cause, with an instruction that the trial court clarify its

reasoning.

                                                III.

       {¶19}    The judgment of the Summit County Court of Common Pleas is reversed, and

the matter is remanded with the instruction that the court set forth its reasoning in vacating its

default judgment.

                                                                                Judgment reversed,
                                                                               and cause remanded.

       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.
                                                8

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

       Costs taxed to Appellee.

                                                    CARLA MOORE
                                                    FOR THE COURT

BELFANCE, J.
WHITMORE, J.
CONCUR.

APPEARANCES:

JEFFREY C. MILLER, Attorney at Law, for Appellant.

JAMES S. WERTHEIM and MONICA LEVINE LACKS, Attorneys at Law, for Appellee.