HOME SAVINGS AND LOAN CO. OF YOUNGSTOWN, OHIO v. MIDWAY MARINE, INC. dba MIDWAY LEASING, INC., et al.
CASE NO. 10 MA 109
STATE OF OHIO, MAHONING COUNTY IN THE COURT OF APPEALS SEVENTH DISTRICT
May 25, 2012
[Cite as Home S. & L. Co. v. Midway Marine, Inc., 2012-Ohio-2432.]
Hon. Cheryl L. Waite, Hon. Joseph J. Vukovich, Hon. Mary DeGenaro
Civil Appeal from the Court of Common Pleas of Mahoning County, Ohio Case No. 09 CV 1971. JUDGMENT: Affirmed.
For Plaintiff-Appellee: Atty. James G. Floyd, 1200 Metropolitan Tower, Youngstown, Ohio 44503
For Defendant-Appellant: Atty. John C. Ragner, Atty. Andrew T. Hayes, Atty. Steven R. Hobson, Towne, Hanna & Rasnick Co., L.P.A., 388 South Main Street, Suite 402, Akron, Ohio 44311
Summary
{¶1} In this appeal Mercure presents three issues: first, whether a trial court’s civil contempt finding becomes criminal due to the court’s obvious disapproval of Appellant’s actions. Second, whether Appellant’s due process rights were violated by an alleged failure of service argument that Appellant failed to raise in the trial court. Third, whether Appellant received ineffective assistance of counsel in the trial court. Our review of the record reveals that all of Appеllant’s arguments lack merit and the trial court’s decision is affirmed.
{¶2} This appeal revolves around a finding of contempt against Appellant, Michael Mercure who operated a business known as Midway Marine, Inc. Midway Marine, Inc., while a party to the underlying action, is not a party to the instant appeal. The record reveals the following: Appellant Mercure, on behalf of Midway Marine Inc. executed a secured purchase money loan agreement with Home Savings & Loan Co., Appellee herein, for the purchase of a high performance yacht and motor. The yacht and motor secured payment on the note and a lien was recorded on the title to the yacht by Appellee. Several years after the initial transaction, payment on the note had deteriorated from erratic to nоnexistent. Appellee simultaneously filed a replevin action to recover the yacht and a complaint for the money due on the note. Appellee sought and received a writ of possession. Appellant Mercure was served with the writ of possession but failed to produce the yacht. When Mercure was deposed he acknowledged the debt, but refused to reveal
Facts
{¶3} The underlying suit from which the contеmpt action arose involved both a replevin action seeking the return of collateral and an action on a promissory note executed by Appellant Mercure on behalf of Midway Marine, Inc. to Appellee Home Savings and Loan Co. The note was executed on July 30, 2003, and secured by a 50’ Hustler performance yacht and its 470 HP Mercruiser motor, which were to be purchased with the proceeds of the loan. On May 27, 2009, Appellee, alleging a
{¶4} On May 28, 2009 the trial court set bond for both Mercure and Midway Marine, Inc., and granted Appellee a writ of possession. A summons was issued and a process server appointed that same day. On June 8, 2009 the appointed process server filed three returns of service. The first indicated that after five attempts, the residential address provided by Appellee for Mercure appeared to be vacant. The second and third returns reflected personal service on Mercure and service on Midway Marine, both at the same address, and signed for by a “Mr. Parker.” On June 26, 2009 Mercure filed an answer through counsel generally denying the
{¶5} During the same period, Appellee conveyed the writ of possession to the sheriff’s department, which mаde several unsuccessful attempts to locate and secure the yacht and motor.
{¶6} On August 10, 2009, Appellee deposed Mercure in connection with this matter. At the deposition, Mercure repeatedly stated he wished to invoke his Fifth Amendment rights in response to any question concerning the whereabouts of the yacht and his dealings with Warren Tillerson, the Texas resident who may have had possession of the yacht and who made several loan payments to Home Savings on behalf of Mercure for the note secured by the yacht. (Mercure Depo., pp. 6-7, 34-40.) Mercure was personally served the May 28, 2009 writ of possession on the record during the deposition and was informed that the court would be notified of any continued failure to produce the yacht. Mercure failed to produce the yacht or any information to lead to its discovery.
{¶7} On August 14, 2009, Appellee filed a show cause motion due to Mercure’s failure to produce the yacht and refusal to disclose its location. Appellee raised, as cause, Mercure’s attempts to invoke the Fifth Amendment during the deposition and asked that he be held in direct contempt, pursuant to
{¶8} The show cause hearing was held on August 28, 2009. Counsel for Mercure appeared but Mercure, himself, did not. Those present stipulated that the yacht had not been delivered to Home Savings. Mercure’s counsel argued during the hearing that the record did not reflect a return of service on Mercure. He did not, however, argue that his client had not been served. It appears inarguable that Mercure’s counsel received the motion, in light of his presence at the hearing. The hearing went forward as scheduled and the magistrate filed a decision on November 12, 2009.
{¶9} On November 23, 2009, Mercure executed and filed a copy of an affidavit which appears in the record as a “Notice of Efforts to Purge.” The document in the record is a copy and it is unclear whether the actual affidavit was ever filed. In it, Mercure states that he purchased a Hustler Power Boat in 2003 and financed the purchase through Home Savings. He swears that he delivered the yacht to a Mr. Tillerson, of Texas, in November of 2007 and that Tillerson agreed to be responsible for payment of the remainder of the obligation to Home Savings until it was “fully and completely satisfied.” (Mercure Aff., ¶4.) Attached to, but not referenced in, the
{¶10} Mercure acknowledged in his affidavit that on Nоvember 18, 2009 he was aware of the “contempt citation against him,” which appears to refer to the magistrate’s November 12, 2009 decision finding him in contempt, copies of which were served by the clerk on November 17, 2009. He explained that his efforts to purge contempt consisted of a phone call to Tillerson requesting that the yacht be made available to him. Mercure avers that Tillerson “threatened to kill me and advise that ‘somebody came to his house and took the boat and he did not want to get involved,’” and that Tillerson also told him that the yacht had been kept in a locked storage facility at all times. (Mercure Aff., ¶9-10.) Mercure concluded that he had, in the form of this phone call, “taken all reasonable measures to procure the boat in question for return to Home Savings Bank” and that it was his belief that the yacht еither remained with Tillerson in Texas or had already been repossessed by Appellee, Home Savings. (Mercure Aff., ¶11-12.) Appellee filed in opposition to Mercure’s notice of efforts to purge contempt. It did not object to the form of the affidavit and unincorporated exhibit, but detailed the contradictions between the information contained in the affidavit and Mercure’s repeated, apparently unmerited, invocations of his Fifth Amendment rights during the August deposition. Appellee
{¶11} The trial court adopted the magistrate’s decision in the absence of оbjections on December 17, 2009 and it was entered in the record on December 23, 2009. The trial court specifically found Mercure was in indirect civil contempt and ordered him to either (1) serve thirty (30) days in jail and pay a fine of $250.00 or (2) purge contempt by producing the yacht within ten days of the entry of the court’s judgment. The trial court specifically ordered personal service of the judgment entry on Mercure. Docket entries on December 29, 2009 show service to Mercure of the entry was attempted via regular and certified U.S. Mail in addition to personal service. The order for service was returned indicating that there was a failure to make contact on January 7, 2010. On March 31, 2010, Appellee sought and received leave to use a private process server to serve the December 23, 2009 judgment. No return of service was filed. On July 8, 2010 Appellee was again granted leave for private party service of the judgment; return of service was filed July 9, 2010.
{¶12} Between the December 23, 2009 judgment entry finding Mercure in contempt and service of the contempt order on July 9, 2010, Appellee sought and received summary judgment with regard to the amount due on the promissory note. The initial summary judgment motion was filed on March 25, 2010. Mercure filed timely objections to the magistrate’s subsequent April 26, 2010 decision as well as a
{¶13} During the same period, Appellee also sought, and the magistrate signed, a release of the replevin bond, as the collateral was now subject to the trial court’s contempt order. The order releasing bond has apparently not yet been adopted by the trial court. The action on the note itself was resolved in summary judgment; the replevin action is pending on the outcome of this appeal.
Procedural History
{¶14} Mercure initially filed his notice of appeal on July 12, 2010. His July 12 notice identified a June 14, 2010 judgment entry as the final order on appeal. As we subsequently noted, there was no order entered by the trial court on June 14, 2010. Instead there was a June 4, 2010 entry, adopting the magistrate’s decision granting summary judgment to Appellee Home Savings with regard to the action on the note. According to the docket, the service copies were issued and mailed on June 14, 2010. On July 27, 2010 Mercure filed an amended notice of appeal, identifying the trial court’s December 23, 2009 judgment entry as the basis for appeal, claiming the 2009 entry was not served on either he or his counsel until July 9, 2010. Given the multiple bases cited for appeal and the seeming untimeliness of the conflicting
{¶15} A motion for stay of execution pending the outcome of appeal had been filed in the trial court on August 12, 2010. On September 16, 2010 the trial court indicated that the motion would be taken under advisement, and entered no subsequent ruling. New counsel filed a motion for stay of execution in this Court on September 28, 2010, referring to the earlier motion and renewing the request, citing principles of fairness. We granted Mercure’s motion for stay of execution on October 14, 2010, and held his thirty days of incarceration and $250.00 fine in abeyance pending the outcome of this appeal. Mercure has filed his merit brief. No Appellee’s brief has been filed.
Argument and Law
{¶16} Mercure’s first and second assignments of error challenge the procedure follоwed and the penalty imposed by the trial court pursuant to
ASSIGNMENT OF ERROR NO. 1
THE TRIAL COURT VIOLATED MR. MERCURE’S DUE PROCESS RIGHTS AND ERRED BY SENTENCING MR. MERCURE TO 30 DAYS IN JAIL FOLLOWING A CONTEMPT HEARING HELD IN ABSENTIA AND WHERE MR. MERCURE DID NOT RECEIVE PROPER OR REASONABLE NOTICE, TIME TO PREPARE A DEFENSE, AND AN OPPORTUNITY TO BE HEARD AT HEARING.
ASSIGNMENT OF ERROR NO. 2
THE TRIAL COURT ERRED IN ORDERING IMPRISONMENT TO MR. MERCURE AS A PUNISHMENT FOR A CIVIL DEBT IN VIOLATION OF ARTICLE I, SECTION 15 OF THE OHIO CONSTITUTION.
{¶17} A trial court’s contempt finding is reviewed for abuse of discretion. State ex rel. Ventrone v. Birkel, 65 Ohio St.2d 10, 11, 417 N.E.2d 1249 (1981). Abuse of discretion connotes more than an error of judgment; it implies that the court‘s attitude was unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983). “When applying the abuse of discretion standard, a reviewing court is not free to merely substitute its
{¶18} Mercure argues that in the matter below, although the trial court found his failure to comply with the writ of possession was indirect civil contempt, the trial court’s finding and penalty imposed were, in fact, criminal, because the language of the magistrate’s decision disclosed an overriding punitive purpose and the sentence itself is “punitive in nature and operates as a punishment for a completed act of disobedience * * * [and] used ‘to vindicate the authority of the court.’” (Appellants’ Brf., p. 9). Mercure maintains that the penalty imposed by the court below conditions future behavior in a manner more commonly associated with criminal contempt than with civil contempt. Therefore, Mercure claims, it triggered a need to comply with the due process requirements associated with criminal contempt. He urges that as a criminal contemnor his presence was required at the hearing before any penalty for contempt could be imposed. Mercure is mistaken in his interpretation of this record.
{¶19} Contempt has been defined by the courts as the disregard or disobedience of an order or command of judicial authority. See, First Bank of Marietta v. Mascrete, Inc., 125 Ohio App.3d 257, 263, 708 N.E.2d 262 (1998). Contempt may also involve an act or omission that substantially disrespects the judicial process in a particular case. Byron v. Byron, 10th Dist. No. 03 AP 819, 2004-Ohio-2143 at ¶11, appeal not allowed by 103 Ohio St.3d 1462, 2004-Ohio-5056, 815 N.E.2d 678. Contempt can be characterized as either direct or indirect. Id. at ¶12. Direct contempt occurs when a party engages in conduct in the presence of the court
{¶20} Courts may further characterize contempt as criminal or civil, depending on the nature of the contempt sanctions. Criminal contempt imposes sanctions that are punitive in nature, and are designed to punish the party for past failures to comply with the court‘s order. State ex rel. Corn v. Russo, 90 Ohio St.3d 551, 555, 740 N.E.2d 265 (2001). Criminal contempt usually involves mandatory incarceration, and the party found to be in contempt usually has no opportunity to avoid the incarceration. Brown v. Executive 200, Inc., 64 Ohio St.2d 250, 253, 254, 416 N.E.2d 610 (1980).
{¶21} Civil contempt, on the other hand, is remedial or coercive in nature, and will be imposed to benefit the complainant. DeLawder, supra, at ¶9, citing Pugh v. Pugh, 15 Ohio St.3d 136, 139, 472 N.E.2d 1085 (1984). Any sanction imposed by the court for civil contempt must provide the cоntemnor with an opportunity to purge the contempt. DeLawder, supra, at ¶10. “The contemnor is said to carry the keys of
{¶22} A trial court’s authority to impose sanctions for contempt of court is part of the inherent power of the court to govern proceedings. Denovchek v. Bd. of Trumbull Cty. Commrs., 36 Ohio St.3d 14, 15, 520 N.E.2d 1362 (1988). Contempt is also defined by statute and penalties are prescribed by
R.C. 2705.02 Acts in Contempt of court. A person guilty of any of the following acts may be punished as for a contempt:(A) Disobedience of, or resistance to, a lawful writ, process, order, rule, judgment, or command of a court or officer
* * *
(C) A failure to obey a subpoena duly served, or a refusal to be sworn or to answer as a witness, when lawfully required * * *
R.C. 2705.03 Hearing.
[A] charge in writing shall be filed with the clerk of the court, an entry thereof made upon the journal, and an opportunity given to the acсused to be heard, by himself or counsel. * * *
R.C. 2705.05 Hearings for contempt proceedings. (A) In all contempt proceedings, the court shall conduct a hearing. At the hearing, the court shall investigate the charge and hear any answer or testimony that the accused makes or offers and shall determine whether the accused is guilty of the contempt charge. If the accused is found guilty, the court may impose any of the following penalties:(1) For a first offense, a fine of not more than two hundred fifty dollars, a definite term of imprisonment of not more than thirty days in jail, or both;
* * *
The statute governing contempt is silent as to the requirements of service, as is the Ohio Supreme Court caselaw on the subject. However, the Supreme Court has held that “an action brought under
{¶23} Mercure mis-cites a Fifth District case, Bierce v. Howell, 5th Dist. No. 06 CAF 05 0032, 2007-Ohio-3050, for the proposition that service of a contempt motion on a party’s attorney is insufficient notice and that the initial contempt motion must be served directly on the party. This is not the holding in Bierce, nor is this an accurate statement of the law. While there is, as is noted in Bierce, some divergence among the districts as to the nature of the service required under varying circumstances, the court nevertheless concluded that where contempt is civil in nature, the civil rules regarding notice apply. Id. at ¶20, also Quisenberry v. Quisenberry, 91 Ohio App.3d 341, 346, 632 N.E. 2d 916 (1993) “[i]nasmuch as there is no specified manner of process required for the filing of a motiоn for civil contempt, a person serving such a motion may do so in any manner authorized by the Ohio Rules of Civil Procedure.”
{¶24} The divergences from this principle noted by Mercure and recognized in the Second and Twelfth Districts were due to the fact that the motions filed in those cases were contempt motions seeking enforcement of divorce decrees, sometimes several years after the decree was final. Both courts in this scenario recognized that the contemnor may not have an ongoing relationship with counsel from a divorce that had been concluded. Therefore, the initial motion must be served on the party, not former counsel, as it was in essence a new proceeding. The facts in this case do not merit an enhanced service requirement, nor does the law require it. If in fact the
{¶25} Mercure’s assertion that, due to the court’s obvious disapproval of Mercure’s conduct, the proceeding was inherently punitive and therefore criminal is simply inaccurate. As various courts have noted, “punishment is inherent in contempt, courts will categorize the penalty as either civil or criminal based on the character and purpose of the punishment.” In re J.M., 12th Dist. No. CA2008-01-004, 2008-Ohio-6763, ¶47, citing Brown, supra. The fact that a contempt finding may result in punishment does not necessarily define it as criminal contempt. The instant motion was filed due to Mercure’s failure to produce the object of a replevin action, and his refusal during the deposition to provide any information whatsoever that would lead to the current location of the yacht. The penalty imposed by the court could be completely purged by Mercure if he in some way produced the yacht. This is the precisely in line with the coercive nature that defines a civil contempt. Mercure was unquestionably aware of the writ of possession: he had been served with a copy, and was provided with another copy on the record during his deposition.
{¶26} The transcript of the deposition, which was in the record for the court to consider when ruling on the contempt motion, reflects Mercure’s repeated invocation of his Fifth Amendment privilege in response to any question concerning the current location of the yacht and his interactions with Tillerson. The transcript also reflects that counsel for Appellee contacted Tillerson prior to the deposition and asked about
{¶27} Subsequently, Mercure filed a document entitled “Notice of Efforts to Purge Contempt” concerning his relationship with Tillerson. Mercure’s assertions in that affidavit call into question the propriety of his invocation оf the Fifth Amendment during the deposition, if they are to be believed. In his notice, Mercure claims that he contacted Tillerson and that Tillerson had responded by threatening to kill him. He said Tillerson also told him that the yacht had been removed from Tillerson’s property by “someone” and that Tillerson knew it was being removed, but “did not want to get involved.” (Mercure Aff., ¶9.) At no time did Mercure contradict the information contained in the email from Tillerson to counsel in which Tillerson stated that it was Mercure who had, in fact, removed the yacht from Tillerson’s property in January.
{¶28} Faced with this contradictory information concerning the extent of Mercure’s knowledge concerning the current location of the yacht and his decision to invoke the Fifth Amendment, which in a civil proceeding permits a negative inference, the trial court apparently concluded that Mercure still had knowledge of the yacht’s
{¶29} Finally, as the civil rules of service apply to this contempt motion, service was indisputably perfected on counsel pursuant to
{¶31} Because the record reflects he was properly served with the contempt motion, the only remaining issues are whether Mercure had sufficient notice of the hearing and if the hearing itself was adequate under the statute. No separate notice period is prescribed by the contempt statute. Mercure advances the proposition that fewer than thirty days is generally unreasonable, citing Culberson v. Culberson, 60 Ohio App.2d 304 (1st Dist. 1978); Erven v. Erven, 1981 WL 9623 (1st Dist.); and
{¶32} In contrast, the Sixth District has found that one day of notice, which was subsequently extended to six total days of notice, is adequate in a municipal court nuisance proceeding. Ottawa Hills v. Afjeh, 6th Dist. No. L-10-1353, 2012-Ohio-125. The reviewing court in Ottawa Hills distinguished Poptic because Poptic involved a divorce matter in which the alleged contemnor was in California and the trial court denied the contemnor’s request for continuance and instead tried the contemnor in absentia. The contemnor in Ottawa Hills, however, was present in this state, and had been notified on September 8, 2010 of a contempt hearing to be held
{¶33} The only condition as to notice prоvided by statute is that it must be “reasonable.” No bright line test exists. What constitutes reasonable notice must be evaluated under the circumstances of every individual case. While the Sixth District decision in Ottawa Hills, supra, appears to present an extreme end of the spectrum, there exists a wide range of discretion on the part of the trial court. As this is a civil contempt matter and proceedings are governed by the rules of civil procedure where applicable,
{¶34} Mercure also argues, in support of his first assignment of error, that due process standards prohibit the court from finding the accused in contempt in absentia. Mercure is mistaken in his assertion. As the court in Adams v. Epperly, 27 Ohio App.3d 51, 52, 499 N.E.2d 374 (1985), stated, “[a]mong the rights afforded to both civil and criminal contemnors are notice and an opportunity for a hearing on the matter.” (Citations omitted.) The Court in Adams concluded that in a criminal contempt, as opposed to a civil contempt matter, the alleged contemnor must not only have the opportunity to be present, he must also actually be present at the criminal contempt hearing. In a civil contempt, an alleged contemnor is entitled only to those rights afforded in a civil action. Schrader v. Huff, 8 Ohio App.3d 111, 112, 456 N.E.2d 587 (1983). As is reflected in the language of the statute itself, an opportunity to be heard must be “given to the accused, by himself or counsel.” In the instant matter, Mercure was given notice and he was provided a hearing. At that hearing, the court heard and admitted evidence. Mercure elected not to attend;
{¶35} Finally, Mercure posits that the contempt is moot because Appellee was granted summary judgment on its foreclosure claim. Again, Mercure mistakes the law on this matter. Appellee Home Savings is a secured creditor with an extant lien on the collateral; the money judgment on the note does not satisfy or extinguish the property interest in the collateral. The contempt finding in the replevin action on the collateral is independent of the money judgment on the note. While it is true that had the parties settled the underlying suit, or had Mercure successfully defended the replevin action or produced the collateral, or had the underlying suit been dismissed under
{¶36} Final judgment in a replevin action is defined by
{¶37} Mercure extends his argument that the trial court’s indirect civil contempt finding was in fact a criminal contempt finding to argue that the trial court imposed a criminal penalty on him for a civil debt in violation of his rights under Article I, Section 15 of the Ohio Constitution, which provides that “[n]o person shall be imprisoned for debt in any civil action, on mesne or final process, unless in cases of fraud.” In Mercure’s argument he confuses his contempt finding based on his failure to comply with a court order with being sentenced to prison for the nonpayment of a debt. The record clearly reflects that the jail sentence issued by the trial court in this matter was not a punishment for a civil debt, but was instead a statutorily permitted penalty for civil contempt designed to give Mercure an incentive to comply with the trial court’s writ of possession. Mercure’s failure to comply resulted in a sentence of thirty days of imprisonment, not his failure to pay a civil debt.
ASSIGNMENT OF ERROR NO. 3
MR. MERCURE’S FORMER TRIAL COUNSEL PROVIDED INEFFECTIVE ASSISTANCE OF COUNSEL BY NOT OBJECTING TO THE MAGISTRATE’S DECISION FINDING MR. MERCURE IN INDIRECT CIVIL CONTEMPT AND SENTENCING HIM TO 30 DAYS IN JAIL, WHICH WAS IN VIOLATION OF MR. MERCURE’S DUE PROCESS AND CONSTITUTIONAL RIGHTS.
{¶39} While in an earlier case the Ohio Supreme Court decided to the contrary, In re Calhoun, 47 Ohio St.2d 15, 350 N.E.2d 665 (1976), an accused contemnor in a civil contempt case does have the right to counsel where incarceration is a possible sanction. Lassiter v. Dept. of Social Serv., 452 U.S. 18, 101 S.Ct. 2153, 68 L.Ed.2d 640 (1981). Appellant in the instant matter was represented throughout, and was clearly represented during the contempt hearing.
{¶40} Under
Conclusion
{¶41} The evidence before the court supported a finding of indirect civil contempt. Mercure received sufficient notice of the motion and an opportunity to be heard. His thirty day jail sentence was not imposed for failure to pay a civil debt, but instead, for failure to comply with a court order and he was afforded an opportunity to purge his contempt. Mercure received effective assistance of counsel at the trial level. For these reasons, Mercure’s three assignments of error are overruled and the trial court’s decision is affirmed in total.
Vukovich, J., concurs.
DeGenaro, J., concurs.