PSE Credit Union, Inc. v. Wells
2016 Ohio 7780
| Ohio Ct. App. | 2016Background
- In 2009 James Brown executed a promissory note with PSE Credit Union secured by a 2004 Land Rover; Brown defaulted and later filed bankruptcy.
- In 2013 Andre Wells (d/b/a Wells Auto Repair) obtained a mechanic’s lien on the Land Rover in state court without PSE receiving notice.
- PSE sued Wells (replevin, conversion, unjust enrichment, and declaratory relief to protect its title interest); Wells answered and asserted counterclaims for defamation and tortious interference.
- PSE dismissed its complaint without prejudice in March 2015 but did not answer Wells’s counterclaims; the trial court erroneously dismissed the entire action without prejudice, later reinstating it after recognizing the error.
- Over a year after service of Wells’s counterclaims, PSE filed a Civ.R. 12(B)(6) motion to dismiss those counterclaims; Wells sought default judgment for PSE’s failure to timely respond.
- The trial court granted PSE’s late 12(B)(6) motion to dismiss; on appeal the court reversed, holding the trial court abused its discretion by permitting an untimely motion without excuse and remanded for a default-hearing on Wells’s motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PSE’s Civ.R. 12(B)(6) motion was timely despite no answer within 28 days | A defendant need not answer before moving to dismiss; a motion can substitute for an answer and thus was timely | PSE failed to file an answer or timely motion within 28 days and gave no excuse or motion for extension; subject to default | Court: Untimely — PSE’s motion was filed long after the 28-day window with no request for extension or showing of excusable neglect; trial court abused its discretion in allowing it |
| Whether failure to follow Civ.R. 6(B) and to demonstrate excusable neglect permits late 12(B)(6) | N/A (PSE did not seek or show excusable neglect) | Court rules require leave or a showing of excusable neglect when filing after deadline; absence supports default relief | Court: PSE’s delay and failure to comply with Civ.R. 6(B) procedures precluded filing the untimely motion without leave |
| Whether a party can raise failure-to-state-a-claim defense at any time even without prior pleading raising it | PSE relied on authority that the defense may be raised up to trial | Wells: Defense must be asserted in accordance with civil rules (e.g., in an answer or another pleading) before belated motion; PSE never answered | Court: While the defense can be raised up to trial, it must be raised consistent with the Rules; because PSE never answered or otherwise raised it in a pleading, its belated 12(B)(6) was improper |
| Whether trial court’s grant of 12(B)(6) in lieu of holding default hearing was proper | N/A | Wells asserted he was entitled to default relief and a hearing because PSE failed to respond timely | Court: Moot on appeal (given reversal on timeliness); remanded for default-hearing on Wells’s motion |
Key Cases Cited
- Miller v. Lint, 62 Ohio St.2d 209 (Ohio 1980) (failure to follow civil rules can subject a party to default; court must enforce rule compliance)