Lead Opinion
{¶ 1} Defendants-appellants Joel I. Newman, Joseph Carey and Maingate Shopping Center ("Maingate") appeal a default judgment issued against them as a discovery sanction pursuant to Civ.R. 37. We reverse and remand.
{¶ 2} The relevant facts follow. For a number of years, appellant Newman, an attorney, represented plaintiff-appellee Anthony Gray in various matters, both as retained counsel and on a pro bono basis. In 1993, Gray sustained a head injury, and attorney Newman helped arrange a conservatorship for him. Attorney Newman also represented Joseph Carey and Maingate, parties involved in a laundromat business. When Gray indicated to attorney Newman his interest in obtaining a small business, Newman suggested the laundromat owned by his clients Carey and Maingate. Newman did not represent Gray in this transaction. Gray entered into an agreement with Carey and Maingate directly; the laundromat was unsuccessful, and after several months, Gray abandoned the business.
{¶ 3} A lawsuit followed and Gray, represented by counsel (not Newman) settled the matter by consenting to a judgment against him for $38,822.25, and further entering into a forbearance agreement that provided that, if Gray paid $5000 on or before a date certain, Carey and Maingate would accept that payment in full satisfaction of the debt. Gray did not pay, and hence the full debt, $38,822.25, became a judgment. Judgment liens were issued (the record is silent as to whether *4 the liens ever recovered money) and ultimately Gray filed a Chapter 13 bankruptcy petition in federal court.
{¶ 4} Gray thereafter filed a complaint against attorney Newman with the Disciplinary Counsel, and ultimately the Ohio Supreme Court sanctioned attorney Newman for his involvement in this transaction, concluding that it presented a conflict. Cuyahoga Cty. Bar Assn. v.Newman,
{¶ 5} On December 27, 2004, Gray filed a complaint against Newman, Carey and Maingate, alleging theft. On April 15, 2005, he served a request for production of documents upon the defendants. Newman, representing himself pro se, and Carey and Maingate, acting through counsel, were dilatory in their responses to that request. Gray alleges that those documents were never, in fact, produced.
{¶ 6} Gray filed pleadings requesting default as the discovery sanction. In particular, on August 19, 2005, Gray filed his "Motion for Judgment Under R. 37(D)"-requesting default as a sanction for failure to produce the documents. One month later, he filed another motion cryptically entitled "Plaintiffs Motion to Advance to Judgment" which reads as another motion for default as a discovery sanction. *5
Both these motions were denied without opinion. The court issued no orders compelling discovery at that juncture of the proceeding.
{¶ 7} At a pretrial on February 22, 2006, the court finally ordered outstanding discovery to be completed six days later, February 28, 2006, and set this matter for trial for June 15, 2006. On March 7, 2006, Gray filed a motion to compel (alleging the discovery had not been produced) and a request for sanctions. Three weeks later, on March 27, 2006, the trial court, without notice or a hearing, granted the motion to compel and for sanctions "as unopposed," and rendered default against the defendants. At that time, the court set a hearing on damages to be held on June 15, 2006.
{¶ 8} The defendants finally answered Gray's motion to compel by filing a motion to set aside the default or, in the alternative, to make a finding that there were no damages. This motion was denied.
{¶ 9} The damage hearing was set and reset six separate times. Finally, on February 12, 2007, the court journalized that a hearing was held on damages, and marked the matter "heard and submitted." On that date, the court ordered judgment of $165,366.75 (treble damages) plus statutory interest against Newman, Carey and Maingate. It is from this order that appellants appeal.1 *6
{¶ 10} Appellants argue error in granting the default and/or finding damages exists in this matter, and allege five assignments of error. For ease of resolution, we will address these assignments in tandem, and when appropriate, out of order.
{¶ 11} Appellants' fourth assignment of error alleges that the trial court erred in awarding any damages to Gray, as the evidence presented demonstrated no causal connection between the alleged basis for liability and purported damages. The fifth assignment of error states that the trial court erred in granting judgment for Gray as the complaint failed to state a viable legal claim against appellants for which liability could be imposed.
{¶ 12} It is first important to make clear that we share the frustration of the two trial judges involved in this case with the casual attitude of appellants in responding to what appears to be a minimal discovery request. That request remained pending almost two years and was the subject of numerous requests by Gray for default as a discovery sanction. Additionally, those sanctions were twice denied by the court, thereby providing appellants additional time to respond.
{¶ 13} This opinion in no fashion stands for the proposition that sanctions for failure to respond to discovery are not appropriate; we limit our inquiry to whether a *7 default and the resulting treble damage award were appropriate here under the facts and circumstances as existing in this matter.
{¶ 14} Civ.R. 37(B)(2) grants courts authority to sanction a party for failure to provide discovery: "* * * the court in which the action is pending may make such orders in regard to the failure as are just, [including] * * * an order * * * dismissing the action or proceeding * * *, orrendering a judgment by default against the disobedient party[.]" Dismissals and default judgments are the most severe sanctions available. Although Civ.R. 37 itself requires the court to give notice to counsel that it is considering dismissal or default as the appropriate sanction, Quonset Hut, Inc. v. Ford Motor Co. (1997),
{¶ 15} We will now determine whether the notice here gave appellants reasonable opportunity to defend against default. While two previous motions requesting default were denied by the court without opinion, the motion in question was filed March 7, and granted as "unopposed" on March 27. We note at this *8
juncture that the trial court failed to set a hearing date as required under Civ.R. 55. In Ohio Citizens Trust Co. v. MacKinnon (Mar. 18,1977), Lucas App. No. L-76-285, the Sixth Appellate District, in analyzing a default judgment issued as a discovery sanction under Civ.R. 37, held that the court is required to set a hearing date pursuant to the dictates of Civ.R. 55. Likewise, Mobley v. Palmer, Monroe App. No. 833,
{¶ 16} "Pursuant to Civ.R. 55, when a party defending a claim has failed to plead or otherwise defend that claim, the court may, upon motion, enter a default judgment on behalf of the party asserting the claim. (Citation omitted.) However, if the party defending the action has made an appearance in the action, as appellants have done in this case, the trial court must provide that party with seven days notice of the hearing on the motion for default judgment prior to entering judgment. AMCA Internatl. Corp. v. Carlton (1984),
{¶ 17} Appellants further cite Buckeye Supply Co. v. NortheastDrilling Co. (1985),
{¶ 18} Appellants argue in great detail that the underlying cause of action here, theft, not only does not state a cause of action under the facts of this case,2 but even if it did, such cause would be barred by the statute of limitations. They further argue that even if Gray did state a cause of action, and that action was not barred by the statute of limitations, there was no proximate cause between their actions and any damages. We are aided in our analysis of this argument by the facts as found by the Ohio Supreme Court in Cuyahoga Cty. Bar Assn. v.Newman, supra, and the Certified Supreme Court Record filed in this case.
{¶ 19} It is not the role of this court to rule on a non-existent motion to dismiss pursuant to Civ.R. 12(B)(6), or upon a motion for summary judgment, again, not before this court. (That, alas, must awaitGray v. Newman II or III.) But we do find substantial evidence that, if not rebutted, would result in a conclusion that there is no cause of action here; that if there were a cause of action, it would be barred by the statute of limitations; and, that if there were a cause of action filed appropriately within the statute, no damage proximately resulted therefrom. *10
{¶ 20} Finally, we are persuaded by a decision of this district entitled Cuyahoga Metro. Hous. Auth. v. Watson, Rice Co., Cuyahoga App. Nos. 83230 83633,
{¶ 21} We find here that the degree of sanction imposed is disproportionate to the seriousness of the infraction,3 and accordingly find that the court abused its discretion. *11
{¶ 22} In appellants' second assignment of error, they argue that the trial court erred in denying them the opportunity to present any evidence or legal argument at the January 31, 2007 hearing on the amount of damages, if any, that should be assessed, thereby depriving them of their constitutional right to due process of law. Insofar we are vacating the default judgment in its entirety, and remanding this matter to the trial court to rehear the sanction, that issue is moot.
{¶ 23} Finally, in their third assignment of error, appellants argues that the trial court erred in granting judgment against appellant Joseph Carey as the court lacked subject matter jurisdiction over him in this matter. This argument was not made below, and hence will not be considered on appeal. In the matter of Ruth Lipford, Cuyahoga App. Nos. 88267 88444,
Reversed and remanded.
It is ordered that appellants recover from appellee costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the common pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
Notes
After the default judgment, but before the damage judgment, appellants filed a motion to vacate the default judgment pursuant to Civ.R. 60(B). Civ.R. 60(B), however, applies only to final orders, and the order of default without damages was only an interlocutory order. Matsa v.Michael Powers Investigations, Inc., Franklin App. No 05AP-453,
*12MARY J. BOYLE, J., CONCURS
Dissenting Opinion
{¶ 24} I respectfully dissent. Because plaintiffs complaint fails to state a claim and was filed years outside the statute of limitations, I would conclude that a default judgment cannot be entered against defendants, and in no way may the treble damages provision of R.C.
{¶ 25} The majority acknowledges that "this district has held that a default issued as a discovery sanction requires a valid underlying cause of action[,]" citing to Lavelle v. Lee A. Gettling Inc. (Mar. 15, 2001), Cuyahoga App. No. 77684. I would apply this rule herein as it is well-steeled that a default judgment cannot be rendered on a complaint that fails to state a claim upon which relief can be granted.Neiswinter v. Nationwide Mut. Fire Ins. Co., Summit App. No. 23648,
{¶ 26} As the majority further notes, there is substantial evidence that would result in a conclusion that there is no cause of action here. Although this matter was filed pursuant to R.C.
{¶ 27} While the majority and the trial court based their decision upon Newman's counsel's failure to provide discovery, it is not realistic to expect that *14
attorneys would keep files for years after the expiration of the limitations period. Further the medical explanation offered by Newman's counsel was completely disregarded and Newman is treated as though he had not retained counsel in this matter. Moreover, the sanctions provided for in Civ.R. 37(B) (including default judgment) result from a violation of a discovery order, not merely from a discovery request.Grenga v. Bank One, N.A., Mahoning App. No. 04 MA 94,
{¶ 28} Although the majority places heavy reliance upon the fact that the default and treble damages were awarded pursuant to Civ.R. 37 following the failure to comply with discovery, rather than pursuant to Civ.R. 55 for failure to answer, I find this a distinction without a difference. Clearly the failure to answer a complaint is comparable to the failure to provide discovery and would not be entitled to *15
additional procedural protections. Despite the proceedings that occur before a default is entered, a default is, by its nature, not an admission of liability. Belfance v. Resash, Inc., Summit App. Nos. 23415 23437,
{¶ 29} Finally, I am troubled that the trial judge became angry with defendant Newman and/or his counsel and that anger may have infected the proceedings and helped produce the damage award rendered herein. *1