2018 Ohio 1298
Ohio Ct. App.2018Background
- Plaintiffs (three GGNSC entities) sued three LLC defendants (LMOP, NCOP, VLOP) for unpaid sums under an Operation Transfer Agreement and attached the Agreement to the complaint.
- The Agreement listed an address in Beachwood, Ohio and named individuals (including Akiva Grunewald) for notices; plaintiffs served the summons and complaint by Federal Express to the Beachwood address and received delivery confirmations.
- Defendants did not respond and plaintiffs obtained a default judgment in March 2017 for substantial monetary amounts against each defendant.
- In May 2017 defendants moved to vacate under Civ.R. 60(B), arguing service was improper and the court lacked personal jurisdiction because the Beachwood address was not their usual place of business and the individual previously at that address had separated from the companies.
- Plaintiffs opposed, relying on the Agreement, Secretary of State records, and a website showing the Beachwood address. The trial court denied the motion without a hearing.
- The Eighth District reversed and remanded, holding a hearing was required to resolve disputed sworn assertions that defendants did not receive service at that address.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether service of process was proper under Civ.R. 4.2 for LLCs | Service to the Beachwood address (per Agreement, SOS records, website) was reasonably calculated to give notice | Beachwood address was not defendants’ usual place of business and the named contact had left; defendants swore they did not receive service | Remanded for hearing to resolve disputed factual evidence whether service complied with Civ.R. 4.2(G) |
| Whether entry of default judgment was void for lack of personal jurisdiction | Proper service meant court acquired personal jurisdiction so default judgment valid | Lack of proper service means judgment is void ab initio for lack of personal jurisdiction | Court must determine after hearing; if service invalid, vacate judgment; if valid, deny vacatur |
| Whether trial court abused discretion by denying Civ.R. 60(B) motion without hearing | No hearing necessary because service was reasonably calculated and contested affidavits insufficient | Defendants’ sworn affidavits rebut presumption of valid service and require credibility assessment at a hearing | Abuse of discretion to deny without hearing where movant submits sworn non-service statements; remand for evidentiary hearing |
| Standard and burden for rebutting presumption of proper service | Presumption of proper service from following civil rules; plaintiffs relied on documents showing address | Defendants bear evidentiary rebuttal by sworn statements that they did not reside or receive mail at address | If defendant rebuts by affidavit of non-receipt, plaintiff must produce evidence showing the address was valid for service; court must assess credibility at hearing |
Key Cases Cited
- Ohio Valley Radiology Assocs., Inc. v. Ohio Valley Hosp. Assn., 28 Ohio St.3d 118 (Ohio 1986) (default judgment enters when defendant fails to answer)
- Patton v. Diemer, 35 Ohio St.3d 68 (Ohio 1988) (judgment rendered without personal jurisdiction is void)
- Maryhew v. Yova, 11 Ohio St.3d 154 (Ohio 1984) (ways personal jurisdiction may be acquired)
- Rite Rug Co., Inc. v. Wilson, 106 Ohio App.3d 59 (Ohio Ct. App. 1995) (no perfected service and no appearance defeats jurisdiction for default judgment)
- State ex rel. Ballard v. O’Donnell, 50 Ohio St.3d 182 (Ohio 1990) (default judgment without service is void; trial court can vacate)
- Cincinnati Ins. Co. v. Emge, 124 Ohio App.3d 61 (Ohio Ct. App. 1997) (plaintiff bears burden of obtaining proper service)
- Adomeit v. Baltimore, 39 Ohio App.2d 97 (Ohio Ct. App. 1974) (hearing required when motion to vacate alleges operative facts warranting relief)
- Perotti v. Ferguson, 7 Ohio St.3d 1 (Ohio 1983) (cases should be decided on the merits when possible)