Stroud v. Four E Properties, Inc.
2018 Ohio 1910
Ohio Ct. App.2018Background
- Stroud (plaintiff) sued Steven and Nancy Verkley, Four E Properties, Inc., and Strover Holdings, LLC alleging unauthorized 2006 transfers of Strover real property and resulting damage from later 2014–2015 sales. Stroud had separate pending litigation against Steven Verkley at the time.
- Defendants moved to dismiss under Civ.R. 12(B)(6). Stroud’s counsel entered a limited appearance and said an amended complaint would be filed, but no amended complaint was filed and Stroud did not oppose the motion or appear at the dismissal hearing.
- Defendants moved for sanctions under R.C. 2323.51, arguing the claims were time-barred, factually unsupported, and filed to gain leverage in the other suit; they submitted affidavits and documentary evidence.
- The trial court dismissed the complaint, found it unsupported and filed for an improper purpose, and awarded defendants attorney and expert fees. Stroud’s Civ.R. 60(B)(1) motion for relief and later Civ.R. 15 motion for leave to amend (filed after judgment) were denied.
- On appeal Stroud challenged the sanctions award, the denial of his Civ.R. 60(B)(1) motion, and denial of leave to amend; the First District affirmed, largely because Stroud failed to provide transcripts and some post-judgment relief was procedurally improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dismissal and sanctions were improper because claims were not time-barred or meritless | Stroud argued his claims stated causes of action and were not all time-barred | Defendants said claims were time-barred, lacked evidentiary support, and were filed to harass/gain leverage | Court affirmed sanctions dismissal; however, because no transcript was provided, appellate court presumed regularity and relied on other bases to affirm |
| Whether denial of Civ.R. 60(B)(1) relief was error (excusable neglect/meritorious defense) | Stroud claimed excusable neglect because he believed opposing counsel would not press the motion and he had a meritorious claim | Defendants showed email warnings and argued Stroud unreasonably failed to defend; also argued claims lacked merit/time-barred | Court found no excusable neglect and that relief was not warranted; appellate court upheld denial, presuming trial-court record regularity due to absent transcript |
| Whether post-judgment Civ.R. 15 motion to amend should have been allowed | Stroud sought leave to amend after entry of final judgment | Defendants contended post-judgment amendment was procedurally improper | Court (and appellate court) held Civ.R. 15 post-judgment was a nullity once final judgment entered; denial affirmed |
Key Cases Cited
- State ex rel. Bardwell v. Cuyahoga Cty. Bd. of Commrs., 127 Ohio St.3d 202 (2010) (appellate court presumes regularity of proceedings when record is incomplete)
- Knapp v. Edwards Laboratories, 61 Ohio St.2d 197 (1979) (incomplete record on appeal prompts presumption that trial court acted properly)
- GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St.2d 146 (1976) (standards for Civ.R. 60(B) relief: meritorious claim, excusable neglect, timeliness)
- Riston v. Butler, 149 Ohio App.3d 390 (2002) (standard of review for sanctions under R.C. 2323.51 is abuse of discretion)