2016 Ohio 5804
Ohio Ct. App.2016Background
- In June 2013 Rebecca and Matthew Minkin sued Ohio State Home Services, Inc. (OSHS) over a residential waterproofing contract; OSHS did not answer and the court entered default judgment for the Minkins.
- A magistrate awarded damages of $55,814.00 plus $3,087.96 in attorney fees; the trial court adopted that judgment in February 2014.
- The Minkins initiated garnishment in March 2014; OSHS then entered counsel, sought a continuance, and later moved in April 2014 under Civ.R. 60(B) to vacate the default judgment.
- The magistrate held an evidentiary hearing in October 2015 and recommended denying OSHS’s Civ.R. 60(B) motion; the trial court overruled OSHS’s objections and adopted the recommendation in March 2016.
- OSHS appealed, raising three assignments: (1) excusable neglect under Civ.R. 60(B)(1); (2) judgment satisfaction/release under Civ.R. 60(B)(4) based on an alleged pre-suit settlement; and (3) lack of subject-matter jurisdiction due to a mandatory arbitration clause (or, alternatively, waiver of arbitration).
Issues
| Issue | Plaintiff's Argument (Minkin) | Defendant's Argument (OSHS) | Held |
|---|---|---|---|
| Whether OSHS showed "excusable neglect" under Civ.R. 60(B)(1) to vacate default judgment | Default was proper; no relief — judgment should stand | Manager believed dispute had been resolved pre-suit (a $4,000 check), so failure to respond was excusable | Court held OSHS failed to show excusable neglect; inaction was complete disregard for the judicial system; assignment overruled |
| Whether Civ.R. 60(B)(4) relief was available because the judgment had been satisfied/released via settlement | No prior satisfaction; judgment remains | Parties settled pre-judgment (the $4,000) so judgment should be vacated under (B)(4) | Court held (B)(4) applies only to events after entry of judgment; OSHS relied on pre-judgment events, so relief denied |
| Whether the trial court lacked subject-matter jurisdiction because contract required arbitration | Case properly in court; arbitration issue waived by defendant conduct | Arbitration clause required dismissal/stay; trial court lacked jurisdiction | Court held arbitration does not divest jurisdiction and OSHS waived arbitration by failing to timely seek a stay and by not asserting the right earlier; assignment overruled |
Key Cases Cited
- GTE Automatic Electric, Inc. v. ARC Indus., 47 Ohio St.2d 146 (Ohio 1976) (sets three-prong test for Civ.R. 60(B) relief)
- Kay v. Marc Glassman, Inc., 76 Ohio St.3d 18 (Ohio 1996) (inaction labeled a complete disregard for the judicial system is not excusable neglect)
- Colley v. Bazell, 64 Ohio St.2d 243 (Ohio 1980) (all facts and circumstances must be considered when assessing excusable neglect; Civ.R. 60(B) remedial)
- Doddridge v. Fitzpatrick, 53 Ohio St.2d 9 (Ohio 1978) (balance between finality of litigation and doing justice informs Civ.R. 60(B) analysis)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (Ohio 1983) (abuse of discretion standard explained)
- State ex rel. Tubbs Jones v. Suster, 84 Ohio St.3d 70 (Ohio 1998) (right to arbitrate may be waived)