Court Opinion

ID: 2747102
Source: CourtListenerOpinion
Date Created: 2014-10-31 02:46:29.735581+00
Date Added: 2024-06-11T09:15:50.952735
License: Public Domain

[Cite as Graham's Used Car Outlet v. Stutchman, 2014-Ohio-4807.]

                                      COURT OF APPEALS
                                   RICHLAND COUNTY, OHIO
                                  FIFTH APPELLATE DISTRICT

GRAHAM'S USED CAR OUTLET                            :    JUDGES:
                                                    :
                                                    :    Hon. W. Scott Gwin, P.J.
       Plaintiff-Appellant                          :    Hon. Patricia A. Delaney, J.
                                                    :    Hon. Craig R. Baldwin, J.
-vs-                                                :
                                                    :    Case No. 14CA18
                                                    :
BRYCE STUTCHMAN, ET AL.                             :
                                                    :
                                                    :
       Defendants-Appellees                         :    OPINION

CHARACTER OF PROCEEDING:                                 Appeal from the Mansfield Municipal
                                                         Court, Case No. 09CVH851

JUDGMENT:                                                REVERSED AND REMANDED

DATE OF JUDGMENT ENTRY:                                  October 29, 2014

APPEARANCES:

For Plaintiff-Appellant:                                 For Defendants-Appellees:

JAMES L. BLUNT, II                                       No Appellee Brief Filed
P.O. Box 232
Shelby, OH 44875
Richland County, Case No. 14CA18                                                  2

Delaney, J.

      {¶1} Plaintiff-Appellant Grahams Used Car Outlet appeals the March 4, 2014

judgment entry of the Mansfield Municipal Court.

                       FACTS AND PROCEDURAL HISTORY

      {¶2} Defendant-Appellee Bryce Stutchman purchased an automobile from

Plaintiff-Appellant Grahams Used Car Outlet. The vehicle was purchased for $4,957.68

at an interest rate of 24.14% per annum.

      {¶3} Stutchman filed an initial Bankruptcy Chapter 13 Plan. Stutchman listed

Grahams as an unsecured creditor. Payments were made through the Bankruptcy Court

until June 16, 2008. The bankruptcy case was dismissed on November 12, 2008.

      {¶4} On March 26, 2009, Grahams filed a complaint in the Mansfield Municipal

Court naming Stutchman and Thomas Eaton as defendants. Grahams alleged since the

bankruptcy case was dismissed, there was a balance of $1,696.64 with 24.14% interest

due as of January 7, 2009.

      {¶5} On April 3, 2009, Grahams dismissed Thomas Eaton as a party-

defendant.

      {¶6} On July 17, 2009, the trial court granted Grahams a default judgment

against Stutchman in the amount of $1,696.64 plus court costs and interest at the

contractual rate of 24.14%.

      {¶7} Stutchman filed a second Chapter 13 bankruptcy on June 26, 2010.

Grahams was listed as an unsecured creditor in the amount of $2,917.69, which was

the amount of the claim allowed. Grahams received no payments from Stutchman or the
Richland County, Case No. 14CA18                                                       3

Bankruptcy Trustee in the second bankruptcy case. The second bankruptcy case was

dismissed on September 30, 2011.

      {¶8} On March 16, 2012, Grahams proceeded to execute on the July 17, 2009

judgment by mailing Stutchman a "Notice of Court Proceeding to Collect Debt."

      {¶9} On April 3, 2012, Grahams filed a garnishment on Stutchman.

      {¶10} Stutchman requested a hearing on the garnishment, pursuant to R.C.

2716.06.

      {¶11} A garnishment hearing was held before the magistrate on August 16,

2012. At the hearing, evidence was presented that Stutchman received title to the

vehicle that did not list Grahams as a lien holder. Grahams argued that Stutchman

received clear title to the vehicle because the bankruptcy court had split the debt into

secured and unsecured portions. Stutchman had paid the secured portion in the first

bankruptcy case, thereby enabling her to receive clear title to the vehicle. Grahams also

argued the first Bankruptcy Chapter 13 plan included interest at a rate of 10%. Because

the initial bankruptcy case was dismissed, the interest rate returned to 24.14%.

Grahams received default judgment on the claim on account after the first bankruptcy

case was dismissed and before the second bankruptcy case was filed.

      {¶12} On August 31, 2012, the magistrate issued a judgment entry that found

Stutchman had paid in the full the secured amount of the debt and there was no

unsecured amounts owing to Grahams. The magistrate ordered the funds held in

escrow to be released to Stutchman.

      {¶13} Grahams appealed the judgment entry to this Court. In Grahams Used

Car Outlet v. Stutchman, 5th Dist. Richland No. 12CA92, 2013-Ohio-3609, we reversed
Richland County, Case No. 14CA18                                                      4

the judgment of the trial court. We found that pursuant to Civ.R. 53, the magistrate did

not have authority to sign the August 31, 2012 judgment entry. The case was remanded

to the trial court for further proceedings.

       {¶14} On November 7, 2013, the magistrate issued a magistrate's decision

denying Grahams' request for garnishment based on the payment of the debt.

       {¶15} Grahams filed objections to the magistrate's decision.

       {¶16} On March 4, 2014, the trial court overruled the objections and found in

favor of Stutchman based on the payment of the debt and clear title.

       {¶17} It is from this decision Grahams now appeals.

                                ASSIGNMENTS OF ERROR

       {¶18} Grahams raises three Assignments of Errors:

       {¶19} "I. THE TRIAL COURT SUA SPONTE VACATED THE JUDGMENT

CONTRARY TO OHIO CIVIL RULE 60(B).

       {¶20} "II. THE TRIAL COURT ERRED BY RELYING ON THE DEFENDANTS

BANKRUPTCY WHICH WAS DISMISSED ON TWO OCCASIONS AND FAILED TO

RESTORE THE PARTIES TO THE POSITION IN WHICH THEY WERE FOUND AT

THE COMMENCEMENT OF THE BANKRUPTCY CASE CONCERNING PROPERTY

RIGHTS.

       {¶21} "III. THE TRIAL COURT ERRED BY FINDING ACCORD AND

SATISFACTION WHERE THE BANKRUPTCY COURT IMPOSED ON THE PLAINTIFF

THE SECURED PORTION OF THE DEBT WHICH RESULTED IN THE LIEN BEING

EXTINGUISHED WITH A CLEAR TITLE TO THE DEBTOR."
Richland County, Case No. 14CA18                                                      5

                                      ANALYSIS

                                             I.

      {¶22} Grahams argues in its first Assignment of Error the trial court's March 4,

2014 judgment entry improperly vacated the July 17, 2009 default judgment. We agree.

      {¶23} The trial court granted default judgment against Stutchman on July 17,

2009. The trial record shows that Stutchman never moved to vacate the July 17, 2009

default judgment through a Civ.R. 60(B) motion for relief from judgment.

      {¶24} At the time of the magistrate's hearing, the only matter pending before the

trial court was Stutchman's request for a garnishment hearing. Garnishment

proceedings are governed by statute. Under R.C. 2716.06(C), a garnishment hearing

"shall be limited to a consideration of the amount of the personal earnings of the

judgment debtor, if any, that can be used in satisfaction of the debt owed by the

judgment debtor to the judgment creditor."

      {¶25} In Merchants Acceptance, Inc. v Bucholz, 2nd Dist. Montgomery No.

24425, 2011-Ohio-5556, the Second District Court of Appeals recognized that a

statutory garnishment hearing was not the proper vehicle for relitigating the underlying

judgment. See also Rake-Ree Ents., Inc. v. Timmons, 10th Dist. Franklin Nos. 10AP-

476, 10AP-556, 2011-Ohio-1090. The court held the trial court lacks jurisdiction to

vacate the underlying judgment in the context of a garnishment hearing. Id. at ¶ 31-33.

See also Credit Invests., Inc. v. Addis, 2nd Dist. Montgomery No. 26081, 2014-Ohio-

4249. The scope of the garnishment hearing is "limited to the judgment debtor's claims

of exemption or any defense to the garnishment." Liverpool v. Buckeye Water Dist.,

2012-Ohio-2821, 972 N.E.2d 1090, ¶ 34 (7th Dist.).
Richland County, Case No. 14CA18                                                         6

       {¶26} At the garnishment hearing on August 16, 2012, the magistrate stated at

the start of the hearing, "[a]t this point in time, we're here pursuant to a request by the

Defendants in this matter on a Garnishment Hearing indicating that they do believe that

they are not subject to garnishment." (T. 4). The issues raised before the trial court in

the garnishment proceeding, however, went beyond the consideration of the amount of

the personal earnings of the judgment debtor, if any, that could be used in satisfaction

of the debt owed by the judgment debtor to the judgment creditor. Stutchman argued

the debt was discharged in bankruptcy and she had clear title to the vehicle, therefore

she did not owe Grahams money on the disputed debt. Grahams argued the money

was still owed on the debt. The resulting March 4, 2014 judgment found that Stutchman

did not owe any money and ordered the return of previously garnished funds.

       {¶27} We find the March 4, 2014 judgment of the trial court went beyond the

scope of the statutory garnishment proceedings and improperly vacated the July 17,

2009 default judgment. There was no Civ.R. 60(B) motion for relief from judgment

before the trial court that would permit it to vacate the July 17, 2009 default judgment.

Absent a Civ.R. 60(B) motion for relief from judgment, the trial court lacks authority to

vacate a final judgment. Credit Invests., Inc., supra at ¶ 7.

       {¶28} The first Assignment of Error is sustained.

                                         II. and III.

       {¶29} The second and third Assignments of Error argue the trial court erred

when it considered evidence outside the purview of the statutory garnishment

proceedings. Based on our ruling on the first Assignment of Error, we sustain the

second and third Assignments of Error.
Richland County, Case No. 14CA18                                                   7

                                    CONCLUSION

       {¶30} The judgment of the Mansfield Municipal Court is reversed and the matter

is remanded for further proceedings consistent with this opinion and law.

By: Delaney, J.,

Gwin, P.J. and.

Baldwin, J., concur.