2016 Ohio 365
Ohio Ct. App.2016Background
- Jee served Absolute Fire (and its registered agent Steve Strain) with a breach-of-contract complaint by certified mail on October 27, 2014.
- Absolute Fire did not answer; Jee obtained a default judgment for $120,123 and began garnishment proceedings.
- Absolute Fire moved under Civ.R. 60(B) to set aside the default judgment, supported by Strain’s affidavit stating he (as owner/registered agent) had not known of the complaint and that a new receptionist had failed to notify him.
- The trial court granted the Civ.R. 60(B) motion on grounds of excusable neglect and set aside the default judgment.
- Jee appealed, arguing the trial court abused its discretion because Absolute Fire failed to demonstrate a meritorious defense as required by GTE.
- The appellate court reversed, concluding Absolute Fire did not allege operative facts showing a meritorious defense and therefore relief under Civ.R. 60(B) was improper; the default judgment was to be reinstated.
Issues
| Issue | Plaintiff's Argument (Jee) | Defendant's Argument (Absolute Fire) | Held |
|---|---|---|---|
| Whether the trial court properly granted relief from a default judgment under Civ.R. 60(B) | The court erred; Absolute Fire failed to meet the GTE three-prong test, specifically no meritorious defense shown | Relief warranted because Absolute Fire’s failure to answer was excusable neglect (no notice due to receptionist) and Strain denied the complaint | Reversed: trial court abused discretion. Absolute Fire did not allege operative facts showing a meritorious defense; default judgment reinstated |
Key Cases Cited
- GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St.2d 146 (1976) (establishes three-prong test for Civ.R. 60(B): meritorious defense, ground under rule, and reasonable time)
- Rose Chevrolet, Inc. v. Adams, 36 Ohio St.3d 17 (1988) (standard of review for Civ.R. 60(B) motion is abuse of discretion)
- Elyria Twp. Bd. of Trustees v. Kerstetter, 91 Ohio App.3d 599 (1993) (movant must allege operative facts supporting a meritorious defense rather than conclusory denials)