Court Opinion

ID: 6344844
Source: CourtListenerOpinion
Date Created: 2022-05-27 15:15:10.41394+00
Date Added: 2024-06-11T09:03:27.021837
License: Public Domain

[Cite as Custom Pro Logistics, L.L.C. v. Penn Logistics, L.L.C., 2022-Ohio-1774.]

                     IN THE COURT OF APPEALS
                 FIRST APPELLATE DISTRICT OF OHIO
                      HAMILTON COUNTY, OHIO

 CUSTOM PRO LOGISTICS, LLC,                         :          APPEAL NO. C-210422
                                                               TRIAL NO. A-2001140
         Plaintiff-Appellee,                        :

   vs.                                              :               O P I N I O N.

 PENN LOGISTICS LLC,                                :

           Defendant-Appellant.                     :

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed

Date of Judgment Entry on Appeal: May 27, 2022

Doyle & Hassman, LLC, and Thomas P. Doyle, for Plaintiff-Appellee,

Lindhorst & Dreidame, Co., LPA, Barry F. Fagel and Elizabeth M. Johnson, for
Defendant-Appellant.
                     OHIO FIRST DISTRICT COURT OF APPEALS

ZAYAS, Presiding Judge.
       {¶1}   Defendant-appellant Penn Logistics LLC (“Penn”) appeals the denial of

its motion to vacate the default judgment entered against it by the Hamilton County

Court of Common Pleas and the denial of its motion for relief from judgment under

Civ.R. 60(B). For the following reason, we affirm the judgment of the trial court.

                         Factual and Procedural History

       {¶2}   On March 6, 2020, Custom Pro Logistics, LLC, (“CPL”) filed a complaint

against Penn, alleging three causes of action based on goods allegedly damaged by

defendant during transport. The summons and complaint were issued via certified

mail service to Penn on March 10, 2020. Confirmation of delivery was returned on

March 16, 2020, showing delivery on March 13, 2020. Penn did not file an answer.

On September 11, 2020, CPL moved for a default judgment against Penn, pursuant to

Civ.R. 12 and 55. The trial court granted CPL’s motion for a default judgment on

September 29, 2020, and entered judgment in CPL’s favor.

       {¶3}   Penn filed a motion to vacate the default judgment on December 4,

2020, claiming that Penn never received a copy of the summons and complaint and

did not sign for the certified mail. It claimed that neither a Penn employee nor Penn’s

registered agent was the signatory, and whoever signed for the certified mail did not

give it to Penn. Attached to the motion was an affidavit of Gagandeep Singh, who

claimed to be Penn’s registered agent. The affidavit averred that Penn’s office, at the

address of its principal place of business, is connected to a gas station and that

someone from the gas station, which has no common ownership with Penn, “probably”

signed for the certified mail. CPL filed a response in opposition to the motion and

attached an affidavit of Thomas P. Doyle, attorney for plaintiff, in which Doyle averred

that an accompanying “Google print out” showed that the address of the gas station

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                       OHIO FIRST DISTRICT COURT OF APPEALS

was the same as defendant’s business address and the address of Penn’s registered

agent. The record does not contain a ruling by the trial court on Penn’s motion to

vacate.

          {¶4}   Penn subsequently filed a motion for relief from judgment on March 12,

2021, arguing that it was entitled to relief under Civ.R. 60(B)(1), because, among other

things, Penn never received a copy of the complaint due to excusable neglect and only

became aware of this action once it received the default judgment from the court. After

responsive briefing, the trial court denied Penn’s Civ.R 60(B) motion on July 7, 2021,

stating only that it did not find the motion well taken.

          {¶5}   Penn timely filed a notice of appeal on August 6, 2021, and now raises

two assignments of error for our review. In its first assignment of error, Penn argues

that the trial court erred in denying its Civ.R. 60(B) motion for relief from judgment.

In its second assignment of error, Penn argues that the trial court erred in denying its

motion to vacate the default judgment against it.

                                   Law and Analysis

          {¶6}   A judgment rendered by a court lacking personal jurisdiction is void.

Belisle Constr. Inc. v. Perry, 3d Dist. Crawford No. 3-17-11, 2022-Ohio-239, ¶ 10,

citing Patton v. Diemer, 35 Ohio St.3d 68, 518 N.E.2d 941 (1988), and TCC Mgt., Inc.

v. Clapp, 10th Dist. Franklin No. 05AP-42, 2005-Ohio-4357, ¶ 9. “ ‘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.’ ” (Emphasis sic.) Id. at ¶ 11, quoting Patton

at paragraph four of the syllabus. “Thus, because a trial court has the inherent

authority to vacate a void judgment, when a party claims that the trial court lacks * *

* personal jurisdiction, the party ‘is entitled to have the judgment vacated and need

not satisfy the requirements of Civ.R. 60(B).’ ” Id., citing C & W Invest. Co. v. Midwest

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                     OHIO FIRST DISTRICT COURT OF APPEALS

Vending, Inc., 10th Dist. Franklin No. 03AP-40, 2003-Ohio-4688, ¶ 7. Civ.R. 60(B)

motions only apply to judgments that are voidable, rather than void. Id., citing

Beachler v. Beachler, 12th Dist. Preble No. CA2006-03-007, 2007-Ohio-1220, ¶ 18.

Because a determination that the trial court erred in denying Penn’s motion to vacate

the default judgment would render Penn’s first assignment of error moot, we address

the assignments of error out of order.

                                   Motion to Vacate

       {¶7}    In its second assignment of error, Penn argues that the trial court erred

when it denied its motion to vacate the default judgment against it. We review the

denial of a motion to vacate for an abuse of discretion. Johnson v. Hisle, 1st Dist.

Hamilton No. C-170717, 2018-Ohio-3693, ¶ 9, citing Hoffman v. Hoffman, 1st Dist.

Hamilton No. C-170640, 2018-Ohio-3029. “However, a trial court’s determination of

whether it has personal jurisdiction over a defendant is a question of law that we

review de novo.” Id., citing CommuniCare Health Servs., Inc. v. Murvine, 9th Dist.

Summit No. 23557, 2007-Ohio-4651, ¶ 13. Yet, decisions regarding whether service

was proper are reviewed for an abuse of discretion. Perry at ¶ 22, quoting Britton v.

Britton, 4th Dist. Washington No. 18CA10, 2019-Ohio-2179, ¶ 13. An abuse of

discretion signifies that a decision was unreasonable, arbitrary, or unconscionable.

Britton at ¶ 13.

       {¶8}    Civ.R. 4.3(B)(1) permits a clerk to make service of process outside of this

state in the same manner as provided in Civ.R. 4.1(A)(1) through 4.1(A)(3). Civ.R.

4.1(A)(1) allows for service of process by certified mail, “[e]vidence by return receipt

signed by any person.” (Emphasis added.) Pursuant to Civ.R. 4.2(G), service of

process, pursuant to Civ.R. 4 through 4.6, upon a limited liability company (“LLC”)

shall be made “by serving the agent authorized by appointment or by law to receive

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                        OHIO FIRST DISTRICT COURT OF APPEALS

service of process; or by serving the limited liability company at any of its usual places

of business by a method authorized under Civ.R. 4.1(A)(1); or by serving a manager or

member.” Thus, service upon an LLC is valid if “any person” at the LLC’s usual place

of business signs for the certified mail, even where the recipient is not the defendant’s

agent. Adams, Babner, Gitlitz, LLC v. Tartan Dev. Co. (West), LLC, 10th Dist.

Franklin No. 12AP-729, 2013-Ohio-1573, ¶ 9, citing Civ.R. 4.1(A)(1)(a) and Clapp at ¶

11; see Mitchell v. Mitchell, 64 Ohio St.2d 49, 51, 413 N.E.2d 1182 (1980); CUC

Properties VI, LLC v. Smartlink Ventures, Inc., 2021-Ohio-3428, 178 N.E.3d 556, ¶ 9

(1st Dist.).

           {¶9}   “If a plaintiff follows the Ohio Rules of Civil Procedure that govern

service of process, a presumption of proper service arises.” Adams at ¶ 10, citing Erin

Capital Mgt. LLC v. Fournier, 10th Dist. Franklin No. 11AP-483, 2012-Ohio-939, ¶ 18.

“[A] defendant may rebut the presumption of proper service by establishing that the

plaintiff failed to direct service to an address where it would be ‘reasonably calculated’

to reach a person or entity that may be served under Civ.R. 4.2.” Id., citing Fournier

at ¶ 19.

           {¶10} Here, certified mail service was issued to Penn at 600 Buck Road,

Monroeville, NJ 08343. Penn confirmed that this was the address for Penn’s principal

place of business and business office. Two summonses were issued to this address,

one to “Penn Logistics LLC,” and one to “Penn Logistics LLC, CO Jaydeep Patel.” The

record contains a status report regarding Penn from the New Jersey secretary of state,

which lists Penn’s agent as Jaydeep Patel and has the same address listed for the agent

as is listed for Penn’s principal place of business. Both summonses were returned

delivered.

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                     OHIO FIRST DISTRICT COURT OF APPEALS

       {¶11} Thus, CPL complied with the civil rules and a presumption of proper

service was created. Penn first argues that it rebutted the presumption of proper

service because the certified mail delivery was not reasonably calculated to provide

notice to Penn where it was delivered to someone without authority at a “completely

different business.” However, as evidenced in Penn’s affidavit, Penn does not actually

know who signed for the certified mail. Penn only assumed it was someone from the

gas station. Significantly, the evidence in the record established that the gas station

had the same address as Penn’s principal place of business and Penn’s registered

agent. Notably, Penn does not argue that this address was incorrect or that any

additional identifying information was needed when addressing mail to Penn. It does

not argue that Penn or its statutory agent did not receive mail at this address, nor that

Penn did not do business at this address. We noticed that the affidavit submitted by

Penn claimed that Gagandeep Singh was Penn’s registered agent; however, the

business status report in the record, dated March 3, 2020, lists Jaydeep Patel as Penn’s

registered agent. Regardless, Penn does not assert any challenge to the address used

by CPL or claim that its statutory agent had a different address. It does not allege

anything that CPL should have done differently when perfecting service. Thus, there

is nothing in the record to suggest that service to this address was improper or to

establish that service to this address was not reasonably calculated to reach Penn.

       {¶12} Penn next argues that it rebutted the presumption of proper service by

asserting in its affidavit that an unknown person signed for the certified mail and never

provided Penn with a copy. However, when certified mail service is delivered to a

proper address, a defendant’s claim that the signatory is unknown or unrelated to the

defendant is insufficient to rebut the presumption of proper service. Adams, 10th Dist.

Franklin No. 12AP-729, 2013-Ohio-1573, at ¶ 12. Additionally, certified mail service

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                      OHIO FIRST DISTRICT COURT OF APPEALS

does not require actual service upon the party receiving the notice; rather, it is effective

upon certified delivery. See Castellano v. Kosydar, 42 Ohio St.2d 107, 110, 326 N.E.2d

686 (1975); Goering v. Lacher, 1st Dist. Hamilton No. C-110106, 2011-Ohio-5464, ¶

11; Claims Mgt. Servs., Inc. v. Tate, 1st Dist. Hamilton No. C-000034, 2000 Ohio App.

LEXIS 4474, *3 (Sept. 29, 2000). The Ohio Supreme Court has stated that the need

for actual notice is contradictory to modern service requirements. See Castellano at

110. Thus, service and actual notice are distinguishable. See Lacher at ¶ 13; Tate at

*3; Broadvox, LLC v. Oreste, 8th Dist. Cuyahoga No. 92064, 2009-Ohio-3466, ¶ 15.

Consequently, actual notice is not required for certified mail service to be proper. See

id.

       {¶13} “Valid service exists when the civil rules for obtaining service have been

fulfilled.” Broadvox at ¶ 15, citing Tate. Because the certified mail was claimed at

Penn’s place of business in accordance with the civil rules, it was not unreasonable for

the trial court to find that service was valid. See Broadvox at ¶ 15. Thus, Penn failed

to rebut the presumption of proper service and we cannot determine that the trial

court abused its discretion in finding that service was valid. Therefore, we cannot

determine that the trial court erred when denying Penn’s motion to vacate the

judgment against it as the trial court acquired personal jurisdiction over Penn when

service of process upon Penn was complete. See Maryhew v. Yova, 11 Ohio St.3d 154,

156, 464 N.E.2d 538 (1984) (“[Personal Jurisdiction] may be acquired * * * by service

of process upon the defendant * * *.”). Accordingly, this assignment of error is

overruled.

                 Motion for Relief from Judgment under Civ.R. 60(B)

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                     OHIO FIRST DISTRICT COURT OF APPEALS

       {¶14} In its first assignment of error, Penn argues that the trial court erred

when it denied its Civ.R. 60(B) motion for relief from judgment. “If a judgment by

default has been entered, the court may set it aside in accordance with Rule 60(B).”

Civ.R. 55(B). An argument that a defendant did not receive actual notice is not

jurisdictional and is thus properly brought pursuant to Civ.R. 60(B). Broadvox at ¶

16.

       {¶15} In relevant part, Civ.R. 60(B) provides that, “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 * * * mistake, inadvertence, surprise, or excusable

neglect * * *.” Civ.R. 60(B)(1). To prevail on a Civ.R. 60(B) motion, “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 for 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, 150-151, 351 N.E.2d 113 (1976). “The decision

whether to grant relief from judgment lies within the trial court’s discretion.”

Engelhart v. Bluett, 1st Dist. Hamilton No. C-160189, 2016-Ohio-7237, ¶ 16.

       {¶16} Penn argues that it is entitled to relief from judgment under Civ.R.

60(B)(1) because lack of actual notice is a “proper, and compelling, basis for excusable

neglect.”   “A determination of excusable neglect depends on the facts and

circumstances of each case.” Engelhart at ¶ 18, citing Heard v. Dubose, 1st Dist.

Hamilton No. C-060265, 2007-Ohio-551, ¶ 19. “Courts have defined excusable neglect

in the negative, stating that a defendant’s inaction is not excusable neglect when it

shows a complete disregard for the judicial system or its [sic] falls substantially below

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                      OHIO FIRST DISTRICT COURT OF APPEALS

what is reasonable under the circumstances.” Id., citing State ex rel. Jackson v. Adult

Parole Auth., 140 Ohio St.3d 23, 2014-Ohio-2353, 14 N.E.3d 1003, ¶ 25, and Heard at

¶ 19.

        {¶17} Neglect is inexcusable “when is it a ‘ “consequence of the party’s own

carelessness, inattention, or willful disregard of the process of the court * * *,” ’ as

opposed to a ‘ “consequence of some unexpected or unavoidable hindrance or

accident.” ’ ” (Ellipses sic.) Treasurer of Lucas Cty. v. Mt. Airy Invests. Ltd., 6th Dist.

Lucas No. L-18-1254, 2019-Ohio-3932, ¶ 26, quoting Mason v. Mason, 5th Dist. Perry

No. 10-CA-18, 2011-Ohio-4775, ¶ 28. Negligent or insufficient internal procedures in

an organization may not constitute excusable neglect. John W. Judge Co. v. USA

Freight, LLC, 2d Dist. Montgomery No. 27708, 2018-Ohio-2658, ¶ 27, citing

Middleton v. Luna’s Restaurant & Deli, LLC, 5th Dist. Stark No. 2011 CA 00004, 2011-

Ohio-4388, ¶ 31.

        {¶18} This court has upheld a trial court’s finding that a corporation’s failure

to answer a complaint was excusable neglect where the corporation was properly

served and had procedures in place to be followed when it was served, but the

complaint was never received by the appropriate office due to an unknown,

inadvertent clerical error during the process. Heard at ¶ 21-24. We found that,

“Courts, including this one, have held that a trial court does not abuse its discretion in

granting relief from a default judgment on the basis of excusable neglect, when service

was properly made on a corporation, but a corporate employee failed to forward the

summons and complaint to the appropriate person.” Id. at ¶ 24.

        {¶19} Conversely, in USA Freight, the Second District reversed a trial court’s

determination of excusable neglect where the certified mail service was properly

delivered to address of the LLC’s statutory agent but was signed for by the mother of

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                      OHIO FIRST DISTRICT COURT OF APPEALS

the LLC’s owner, who “understands and speaks very little English,” had no role in the

company, and who failed to forward the complaint to anyone involved with the

business. USA Freight at ¶ 6, 29. The court found that the LLC chose to maintain a

statutory agent “where it was possible for a non-English speaking person who was

unaffiliated with the company to receive important documentation that was served at

that address.” Id. at ¶ 27. Thus, the court found that the mishandling of the complaint

was the result of the LLC’s own negligence in choosing its statutory agent “and/or”

failing to implement sufficient internal procedures to ensure that the documentation

served to that address was directed to the appropriate person. Id.

       {¶20} Thus, inexcusable neglect comes down to whether an entity’s internal

procedures for receiving service are insufficient or negligent. Here, Penn’s business

office, which is also the office of its statutory agent, is located at the address where the

certified mail was delivered. Penn is a New Jersey company, and this is the same

address listed for Penn and its agent with the New Jersey secretary of state. While

there is conflicting evidence in the record on who the statutory agent actually was,

Penn does not dispute this was the correct address for service. Penn’s office is

connected to a gas station, which is a separate company from Penn with no common

ownership. The evidence in the record shows that the address of the gas station is the

same as the address of Penn’s business. Penn does not know who signed for the

certified mail receipt, but it was assumed that it was someone from the gas station.

Penn does not assert that any procedures were put into place to ensure its mail was

delivered to the appropriate business.

       {¶21} Based on these facts, it would be reasonable for the trial court to

conclude that the case at hand is more comparable to the circumstances presented to

the court in USA Freight. Penn attempts to distinguish the instant case from USA

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                     OHIO FIRST DISTRICT COURT OF APPEALS

Freight by stating that the person who mishandled the complaint in this case was not

someone associated with the company who “internally” mishandled the summons and

complaint; however, the complaint was mishandled by someone at the address which

Penn had listed as its business address and the address of its statutory agent. The fact

that two businesses are operating out of the same address is of no consequence to the

result as there is no evidence in the record of any internal procedures put into place at

the address to ensure that service is delivered to the appropriate business or person.

It would not be unreasonable for the trial court to conclude that the mishandling of

the complaint could have been avoided had Penn had better systems in place to ensure

receipt of service or chosen a better statutory agent to receive service on its behalf.

Thus, it would be reasonable for the trial court to have concluded that Penn’s failure

to receive the complaint was a result of its own carelessness or inattention, as opposed

to a consequence of some unexpected or unavoidable hindrance or accident.

Therefore, we cannot determine that the trial court abused its discretion in denying

Penn’s Civ.R. 60(B) motion for relief from judgment as it would be reasonable for the

trial court to have found an absence of excusable neglect in this case. See Jee v.

Absolute Fire Protection, Inc., 1st Dist. Hamilton No. C-150374, 2016-Ohio-365, ¶ 9

(Finding the absence of one of the Civ.R. 60(B) motion requirements sufficient to deny

the motion.).

       {¶22} Penn also argues that the trial court abused its discretion by not

providing any rationale for its decision to deny the motion. However, “ ‘[t]here is no

requirement for that the trial court issue findings of fact and conclusions of law or

otherwise explain its reasons for its disposition of a Civ.R. 60(B) motion,’ particularly

when a party has not made such a request pursuant to Civ.R. 52.” CitiMortgage, Inc.

v. Dudek, 9th Dist. Summit No. 25806, 2012-Ohio-899, ¶ 10, quoting Home S & L Co.

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                     OHIO FIRST DISTRICT COURT OF APPEALS

v. Avery Place, LLC, 5th Dist. Delaware No. 11 CAE 02 0014, 2011-Ohio-4525, ¶ 29;

accord Briggs v. Deters, 1st Dist. Hamilton No. C-961068, 1997 Ohio App. LEXIS

2724, *5-6 (June 25, 1997).

       {¶23} Penn additionally argues that the trial court abused its discretion by not

holding a hearing on its motion. “A trial court possesses discretion when determining

whether to hold a hearing regarding a Civ.R. 60(B) motion.” Detty v. Yates, 4th Dist.

Ross No. 13CA3390, 2014-Ohio-1935, ¶ 20, citing Kay v. Marc Glassman, Inc., 76

Ohio St.3d 18, 19, 665 N.E.2d 1102 (1996). “Thus, an appellate court will not reverse

a trial court’s decision regarding a Civ.R. 60(B) evidentiary hearing absent an abuse of

discretion.” Id., citing Kay. “A party moving for relief from judgment under Civ.R.

60(B) is not automatically entitled to an evidentiary hearing.” (Citation omitted.) Id.

at ¶ 21. “The movant bears the burden to demonstrate that he is entitled to a hearing

regarding a Civ.R. 60(B) motion.” Id., citing PHH Mtge. Corp. v. Northup, 4th Dist.

Pickaway No. 11CA6, 2011-Ohio-6814, ¶ 28. To be entitled to a hearing, the movant

must allege operative facts in the motion sufficient to show that it will prevail on a

Civ.R. 60(B) motion. See id. at ¶ 22.

       {¶24} Here, because Penn did not dispute that the complaint was sent to the

correct address and that two unrelated businesses operate out of that same address,

we cannot determine the trial court abused its discretion in not holding a hearing as

Penn failed to allege operative facts which would demonstrate its entitlement to relief

under Civ.R. 60(B) where Penn did not allege in its motion that any internal

procedures were put into place to ensure receipt of service and where Penn’s statutory

agent also shares the same address. See Treasurer of Lucas Cty., 6th Dist. Lucas No.

L-18-1254, 2019-Ohio-3932, at ¶ 24 (“If the trial court determines that the movant

failed to allege operative facts that would warrant relief under Civ.R. 60(B), it may

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                         OHIO FIRST DISTRICT COURT OF APPEALS

deny the motion without a hearing.”). For all the foregoing reasons, this assignment

of error is overruled.

                                     Conclusion

       {¶25} Having overruled both assignments of error, we affirm the judgment of

the trial court.

                                                                Judgment affirmed.

WINKLER and BOCK, JJ., concur.

Please note:

       The court has recorded its own entry this date.

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