PSE Credit Union, Inc. v. Wells
2016 Ohio 7780
| Ohio Ct. App. | 2016Background
- PSE Credit Union sued Andre Wells after Wells, operating as Wells Auto Repair, obtained a mechanic’s lien on a 2004 Land Rover that PSE claimed as collateral for a promissory note; PSE alleged unjust enrichment and sought a declaratory judgment protecting its title interest.
- Wells answered, moved to dismiss PSE’s complaint in part, and asserted counterclaims for defamation and tortious interference; PSE did not answer those counterclaims.
- After pretrials, PSE voluntarily dismissed its complaint without prejudice but the trial court mistakenly dismissed the entire action (including Wells’s pending counterclaims).
- Wells moved for default judgment on his counterclaims; the court reinstated the case and set a default-hearing date.
- More than a year after service of Wells’s counterclaims and without requesting leave or explaining delay, PSE filed a Civ.R. 12(B)(6) motion to dismiss the counterclaims; the trial court granted it.
- On appeal, the court reversed, holding the trial court abused its discretion in permitting PSE’s untimely 12(B)(6) motion and remanded for a default-judgment hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PSE could file a Civ.R. 12(B)(6) motion more than 28 days after service of counterclaims without leave or showing excusable neglect | 12(B)(6) motion is an alternative to an answer and need not precede an answer; thus it can be filed | PSE missed the 28-day window, never answered, and never moved for leave or shown excusable neglect; default relief was proper | Court: PSE’s untimely 12(B)(6) motion was improperly allowed; reversal for default hearing |
| Whether failure to comply with Civ.R. timing requires default rather than consideration of merits | PSE: defense of failure to state a claim can be raised any time up to trial | Wells: civil rules require timely pleading; noncompliance subjects opponent to default motion | Court: Rule compliance required; PSE’s procedural default barred the motion absent excusable neglect |
| Whether the court could treat PSE’s motion as a late 12(C) / judgment-on-the-pleadings | PSE suggested Rule 12 defenses can be raised in pleadings or at trial | Wells: no answer was filed, so pleadings were not closed and 12(C) was inapplicable | Court: 12(C) inapplicable because pleadings were not closed; PSE never raised defense in a permitted pleading |
| Whether appellate court must remand for default hearing rather than affirm dismissal on merits | PSE: merits-based dismissal appropriate | Wells: procedural irregularity entitles him to default process | Court: Remanded for hearing on Wells’s motion for default judgment |
Key Cases Cited
- Miller v. Lint, 62 Ohio St.2d 209, 404 N.E.2d 752 (Ohio 1980) (courts must enforce procedural rules; failure to comply can subject a party to default)