Case Information
*1
[Cite as
Runyon v. Hawley
,
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT COUNTY OF LORAIN )
JEFFREY A. RUNYON C.A. No. 17CA011141 Appellant
v. APPEAL FROM JUDGMENT ENTERED IN THE JOEL D. HAWLEY, et al. COURT OF COMMON PLEAS
COUNTY OF LORAIN, OHIO Appellees CASE No. 16CV189102 DECISION AND JOURNAL ENTRY Dated: June 25, 2018
CALLAHAN, Judge. Appellant, Jeffrey Runyon, appeals from the judgment of the Lorain County
Common Pleas Court vacating the default judgment against Appellees, Joel Hawley and Hawley Motors, L.L.C. For the reasons set forth below, this Court affirms.
I. Mr. Hawley retained the services of Mr. Runyon to paint and restore a 1960
Lincoln Mark V convertible and to repair and paint a 2012 Jeep Wrangler. Due to Mr. Hawley’s failure to pay for the parts and labor, Mr. Runyon placed a mechanic’s lien on the vehicles and stored the vehicles on his premises for an extended period of time. During this time, Mr. Hawley transferred the title of the Lincoln from his name to his business, Hawley Motors, L.L.C. Mr. Hawley is the statutory agent for Hawley Motors, L.L.C. Mr. Runyon filed a complaint against Mr. Hawley for breach of contract and
quantum merit to recover the costs of the parts and labor and the storage costs of the vehicles. Additionally, the complaint included a demand against Hawley Motors, L.L.C. for a judgment transferring the title of the Lincoln to Mr. Runyon.
{¶4} Service of the summons and complaint was initially attempted on Mr. Hawley and Hawley Motors, L.L.C. via certified mail at 309 County Road 40, Sullivan, Ohio 44880. This address was listed on the complaint and the Ohio Secretary of State’s website as the statutory agent’s address. The certified mail of the summons and complaint for Mr. Hawley and Hawley Motors, L.L.C. were returned as “[u]nclaimed.” Mr. Runyon then requested service of the summons and complaint upon Mr. Hawley and Hawley Motors, L.L.C. by ordinary mail at the same address. The ordinary mail was not returned to the clerk of court for either Mr. Hawley or Hawley Motors, L.L.C. Mr. Runyon moved for default judgment against Mr. Hawley and Hawley Motors,
L.L.C., which the trial court granted. Mr. Runyon filed a certificate of judgment lien and transferred the title of the Lincoln into his name. Six months later, Mr. Hawley and Hawley Motors, L.L.C. filed a Civ.R. 60(B)
motion to vacate the default judgment and a supporting affidavit averring “they were unaware of this case and [] the judgment entered against them” and Mr. Runyon committed a fraud upon the court based on the contents of his affidavit in support of the default judgment. The motion to vacate was fully briefed, but no hearing was held. Pursuant to Civ.R. 60(B), the trial court granted the motion to vacate the default
judgment filed by Mr. Hawley and Hawley Motors, L.L.C. on the basis that they “never received proper service of the [c]omplaint.” Mr. Runyon timely appeals from this judgment entry, asserting three assignments of error. To facilitate the analysis, this Court will address the assignments of error out of order.
II.
ASSIGNMENT OF ERROR NO. 1
THE TRIAL COURT ABUSED ITS DISCRETION BY GRANTING THE MOTION TO VACATE THE DEFAULT JUDGMENT BECAUSE THE DEFENDANTS ALLEGED THEY DID NOT ACTUALLY RECEIVE THE SUMMONS WHEN SERVICE WAS PERFECTED PURSUANT TO THE CIVIL RULES. Mr. Runyon’s first assignment of error sets forth various instances in which the
trial court abused its discretion when it vacated the default judgment because “[Mr. Hawley and Hawley Motors, L.L.C.] never received proper service of the [c]omplaint.” This Court disagrees with each of Mr. Runyon’s sub-arguments.
Motion to Vacate: Civ.R. 60(B) v. Common Law
As an initial matter, Mr. Runyon argues that the motion to vacate should have
been treated as a common law motion. Mr. Hawley and Hawley Motors, L.L.C. filed their
motion to vacate pursuant to Civ.R. 60(B) and the trial court addressed the issue of improper
service of process pursuant to the requirements of Civ.R. 60(B). Mr. Runyon did not raise this
issue in the trial court and, therefore, has forfeited this argument.
See JPMorgan Chase Bank,
Natl. Assn. v. Burden
, 9th Dist. Summit No. 27104,
court having abused its discretion. Generally, a trial court’s decision regarding a common law
motion to vacate is reviewed for an abuse of discretion.
Terwoord v. Harrison
, 10 Ohio St.2d
170, 171 (1967). However, Mr. Runyon is challenging the trial court’s determination that it did
not have personal jurisdiction over Mr. Hawley and Hawley Motors, L.L.C. “‘Challenges to a
trial court’s jurisdiction present questions of law and are reviewed by this Court de novo.’”
First
Merit Bank, N.A. v. Wood
, 9th Dist. Lorain No. 09CA009586,
A Presumption of Service: Compliance with the Civil Rules
Proper service of process is required before a court can render a valid default
judgment.
Gen. Motors Acceptance Corp. v. Kollert
,
that the envelope was unclaimed,” the party requesting service must be notified by the clerk and the party may request service by ordinary mail. Civ.R. 4.6(D). Ordinary mail service is “deemed complete when the fact of mailing is entered of record” and “the ordinary mail envelope is not returned by the postal authorities with an endorsement showing failure of delivery.” Id . Civ.R. 4.2 specifies who may be served. Under that rule, to serve a limited liability company, a plaintiff may direct “[s]ervice of process pursuant to Civ.R. 4 through Civ.R. 4.6” to “the agent authorized by appointment or by law to receive service of process.” Civ.R. 4.2(G). For purposes of service, Mr. Hawley was the statutory agent for Hawley Motors,
L.L.C. See Civ.R. 4.2(G). In this case, the docket reflects that certified mail service issued to Mr. Hawley and Hawley Motors, L.L.C. at 309 County Road 40, Sullivan, Ohio 44880 was returned to the clerk unclaimed. See Civ.R. 4.1(A)(1)(a). At Mr. Runyon’s request, the clerk issued ordinary mail service to Mr. Hawley and Hawley Motors, L.L.C. to the same address, which was not returned to the clerk. See Civ.R. 4.6(D). Based on the above service attempts, the trial court concluded that “[i]t appears [Mr. Runyon] properly followed the Ohio Rules of Civil Procedure in obtaining service.” On appeal, Mr. Hawley and Hawley Motors, L.L.C. argued that the ordinary mail
service was defective and, thus, the presumption of service was not established. A review of the
record reflects that Mr. Hawley and Hawley Motors, L.L.C. did not present this argument to the
trial court and it is, therefore, forfeited on appeal.
See Burden
,
A Rebuttable Presumption of Service: Due Process Compliance
A defendant can rebut the presumption of proper service by presenting sufficient
evidence, such as an affidavit, that service was not accomplished or received by the defendant.
Talarek
, 1997 Ohio App. LEXIS 3164, at *10;
Jacobs
,
requirements of due process.
See Vrbanac v. Zulick
, 9th Dist. Summit No. 19864, 2001 Ohio
App. LEXIS 39, *4 (Jan. 10, 2001);
Akron-Canton Regional Airport Auth. v. Swinehart
, 62 Ohio
St.2d 403 (1980), syllabus. Due process requires that service of process be accomplished in a
manner “‘reasonably calculated, under all the circumstances, to apprise interested parties of the
pendency of the action and afford them an opportunity to present their objections.’” (Emphasis
deleted.)
Swinehart
at 406, quoting
Mullane v. Cent. Hanover Bank & Trust Co
.,
did not receive service of the complaint is sufficient to rebut the presumption of proper service. Wood at ¶ 9-12. While the districts are split as to the effect of the uncontradicted affidavit, this Court has repeatedly adopted the position set out by the Eighth District:
“Where a party seeking a motion to vacate makes an uncontradicted sworn statement that she never received service of a complaint, she is entitled to have the judgment against her vacated even if her opponent complied with Civ.R. 4.6 and had service made at an address where it could reasonably be anticipated that the defendant would receive it.”
Jacobs
at ¶ 14, quoting
Rafalski
, 17 Ohio App.3d at 66-67.
Accord Wood
at ¶ 9;
Medina v.
Davis
, 9th Dist. Lorain No. 11CA009953,
with an affidavit which averred that the address used for service was incorrect. Mr. Runyon directed service of the complaint to Mr. Hawley’s residence address and Hawley Motor, L.L.C.’s statutory agent’s address. Mr. Hawley, however, averred that in March and April of 2016, when certified mail was attempted at the Sullivan, Ohio address, he “was working in Kentucky and traveling back and forth to Sullivan, Ohio.” Then in May of 2016, when ordinary mail was issued, Mr. Hawley averred he “was working in Kentucky full time, residing in Kentucky” and he “resided at 128 Robroy, Nicholasville, [Kentucky] 40356.” Mr. Hawley also averred that he was the statutory agent for Hawley Motors, L.L.C. and incorporated all of the averments, including those regarding the Kentucky address, on behalf of the business. Contrary to Mr. Runyon’s arguments, Mr. Hawley and Hawley Motors, L.L.C.
did contend that the Sullivan, Ohio address was invalid because Mr. Hawley was residing in Kentucky. Because Mr. Hawley, as the statutory agent was not residing within Ohio, Hawley Motors, L.L.C. failed to continuously maintain an agent in Ohio for service of process as required by R.C. 1705.06(A)(1), (D). Based on these averments in the affidavit, the service of process to the Sullivan, Ohio address was not reasonably calculated to reach Mr. Hawley or Hawley Motors, L.L.C. See Grant , 69 Ohio App.2d at 43. Accordingly, the affidavit of Mr. Hawley and Hawley Motors, L.L.C. presented evidence rebutting the presumption of service.
Mr. Runyon’s attempt to refute Mr. Hawley’s Affidavit
The affidavit of Mr. Hawley and Hawley Motors, L.L.C. shifted the burden to Mr.
Runyon to move forward with evidence opposing the motion to vacate.
See Daily
, 1976 Ohio
App. LEXIS 6283, at *5. It was necessary for Mr. Runyon to refute the affidavit of Mr. Hawley
and Hawley Motors, L.L.C. with either his own affidavit or other evidence, or by requesting a
hearing to cross-examine the defendant on his assertion that he did not receive service.
See
Wood
,
Runyon submitted an affidavit which averred that “[t]o the best of [his] knowledge [Mr.] Hawley and his wife still reside at 390 [sic] County Road 40, Sullivan, Ohio.” Mr. Runyon also attached printouts dated April 13, 2017 from the Ashland County Auditor’s office which showed that between 2004 and 2017, Mr. Hawley and his wife owned real estate located at 309 County Road 40. These printouts reflect that on April 13, 2017, the billing address for Mr. Hawley and his wife, for purposes of the real estate taxes, was 309 County Road 40, Sullivan, Ohio 44880. Mr. Runyon’s evidence did not refute the affidavit of Mr. Hawley that he did not receive service of process because he resided in Kentucky and not Sullivan, Ohio during the time service was attempted and completed. Mr. Runyon’s affidavit and the property tax records only indicated that Sullivan, Ohio was Mr. Hawley’s mailing address as of April 13, 2017. Mr. Runyon has not presented any evidence as to Mr. Hawley’s residence or address during March, April, and May of 2016, the relevant time period in question for the service of process. Mr. Runyon’s affidavit, evidence, and brief in opposition failed to point to any direct evidence contradicting the averments by Mr. Hawley regarding his Kentucky residence during the period of service of process and his lack of receipt of the complaint. See Wood at ¶ 10. Instead, Mr. Runyon’s competing affidavit suggested that Mr. Hawley should have received the complaint. See id . at ¶ 9. Moreover, Mr. Runyon did not request a hearing to elicit contradictory testimony
from Mr. Hawley as to the issue of where Mr. Hawley was residing. See Wood at ¶ 10 . Instead, Mr. Runyon argued that no hearing was necessary. Upon review of Mr. Runyon’s evidence and affidavit, and in conjunction with his affirmative decision to decline a hearing, Mr. Runyon failed to refute the affidavit of Mr. Hawley regarding the validity of the service of process. Accordingly, the affidavit of Mr. Hawley was uncontradicted.
Mr. Runyon’s attempt to refute Hawley Motors, L.L.C.’s Affidavit In addition to the foregoing arguments, Mr. Runyon also relies upon R.C. 1705.06 to refute the affidavit of Hawley Motors, L.L.C. regarding the validity of the service of process to Sullivan, Ohio upon the business.
{¶27} With respect to limited liability companies, R.C. 1705.06 provides that the company “shall maintain continuously in this state an agent for service of process on the company” and that “[a]ny legal process, notice, or demand required or permitted by law to be served upon a limited liability company may be served * * * [on] the agent * * * by delivering a copy of the process, notice, or demand to the agent.” R.C. 1705.06(A), (H)(1)(a). Mr. Runyon asserts that Mr. Hawley “still resides” in Sullivan, Ohio and the
Secretary of State’s records reflect that Hawley Motors, L.L.C. is an active business using Mr. Hawley as its statutory agent at the Sullivan, Ohio address. Based on those facts, Mr. Runyon argues that Hawley Motors, L.L.C. had a “statutory responsibility” “to accept service at any time at its agent’s address” and Hawley Motors, L.L.C. acted at its “own peril” when it failed to appoint a new statutory agent after Mr. Hawley moved outside of Ohio. Mr. Runyon contends a limited liability company cannot challenge the
presumption of service issued to the agent’s address based upon the agent’s address being
incorrect or the agent having “temporarily left the state.” Neither of the cases cited by Mr.
Runyon supports his argument that R.C. 1705.06 creates an unrebuttable presumption of service.
In
Denittis v. Aaron Constr., Inc.
, 11th Dist. Geauga No. 2011-G-3031, 2012-
Ohio-6213, the Eleventh District specifically identified the defendant’s failure to rebut the
presumption of service upon the statutory agent as the basis to affirm the denial of the
defendant’s motion to vacate.
Id
. at ¶ 41. Additionally,
S & S Quality Remodeling v. Phoenix
Remediation
, 2d Dist. Montgomery No. 26091,
{¶31}
Further, this Court finds
Lauver v. Ohio Valley Selective Harvesting, LLC
, 12th
Dist. Clermont No. CA2016-11-076,
affidavit testimony that Hawley Motors, L.L.C.’s statutory agent did not receive the service of process because the agent resided out of state. Hawley Motors, L.L.C., through Mr. Hawley, averred that its statutory agent resided in Kentucky, and not Ohio, during May of 2016 when the ordinary mail service was completed. While Hawley Motors, L.L.C.’s affidavit served as an admission that it violated the statute which required it to continuously maintain an agent in Ohio for service of process, there is no provision in R.C. 1705.06 that interprets a violation of the statute as creating an unrebuttable presumption of service. Upon review of Mr. Runyon’s evidence, his position opposing a hearing, and his
reliance upon R.C. 1705.06, Mr. Runyon failed to refute the affidavit of Hawley Motors, L.L.C. regarding the validity of the service of process upon the business. Accordingly, the affidavit of Hawley Motors, L.L.C. was also uncontradicted.
The Effect of an Uncontradicted Affidavit
Mr. Runyon contends that the trial court abused its discretion when it vacated the
default judgment based on Mr. Hawley and Hawley Motors, L.L.C.’s “self-serving affidavit
without other evidence.” Mr. Runyon relies on case law from other districts to argue that an
affidavit alone is insufficient to rebut the presumption of service. Mr. Runyon’s reliance on the
other Ohio districts is misplaced, because there is a split in the districts regarding the effect of an
affidavit to rebut the presumption of service. Regardless, this Court has consistently held that an
uncontradicted affidavit attesting that the defendant did not receive service of the complaint is
sufficient to rebut the presumption of proper service.
See, e.g., Wood
,
specifically averred the address used for the service of process was invalid.
See Jacobs
, 2006-
Ohio-1312, at ¶ 15-18 (service sent to defendant’s parents’ house, but defendant and his parents
filed affidavits saying he did not live there);
Medina
,
Actual Notice
Mr. Runyon argues that “[t]he trial court abused its discretion when it vacated the default judgment in this case based upon [Mr. Hawley and Hawley Motor, L.L.C.’s] claim that they did not receive actual notice of the summons.” This statement by Mr. Runyon is not supported by the record. The trial court did not address, nor grant the motion to vacate based upon a lack of receipt of “actual notice of the summons,” but instead upon a lack of receipt of “proper service of the [c]omplaint.” Because Mr. Runyon’s actual notice argument is based upon an incorrect factual premise, this Court overrules this argument without further discussion.
{¶37} Based on the foregoing, the trial court did not err in finding that the trial court lacked personal jurisdiction due to improper service of process and vacating the default judgment against Mr. Hawley and Hawley Motors, L.LC.
{¶38} Mr. Runyon’s first assignment of error is overruled.
ASSIGNMENT OF ERROR NO. 3
THE TRIAL COURT ABUSED ITS DISCRETION BY GRANTING THE MOTION [] TO VACATE THE DEFAULT JUDGMENT WITHOUT A HEARING. Regarding the issue of improper service, Mr. Runyon argues that the trial court
abused its discretion when it accepted Mr. Hawley’s affidavit and did not “afford[ Mr.] Runyon an opportunity to cross-examine and rebut [the affidavit] at [a] hearing.” Mr. Runyon’s contention lacks merit. A trial court’s decision regarding whether to grant an evidentiary hearing on a
motion to vacate is reviewed under an abuse of discretion standard.
State v. Navedo
, 9th Dist.
Lorain No. 10CA009923,
the defendant’s failure to receive service and supported by a sworn statement, may request a
hearing to solicit contradictory testimony.
Wood
,
trial court abused its discretion in not holding a hearing. “Under the invited-error doctrine, a
party will not be permitted to take advantage of an error that he himself invited or induced the
trial court to make.”
State ex rel. Beaver v. Konteh
,
{¶44} Mr. Runyon’s third assignment of error is overruled.
ASSIGNMENT OF ERROR NO. 2
THE TRIAL COURT ABUSED ITS DISCRETION WHEN IT VACATED THE DEFAULT JUDGMENT UNDER OHIO CIV.[]R. 60(B) FINDING THAT DEFENDANTS “HAVE SATISFIED EACH PRONG OF THE GTE TEST” WITHOUT SUPPORTING EVIDENCE OF FRAUD.
{¶45} In his second assignment of error, Mr. Runyon contends that the trial court abused its discretion when it granted the motion to vacate on the basis of fraud. This Court disagrees.
{¶46} On appeal, Mr. Runyon acknowledges that Mr. Hawley and Hawley Motors, L.L.C. alleged “improper service and fraud” as the bases for granting relief from the default judgment. Mr. Runyon argues that Mr. Hawley and Hawley Motors, L.L.C. improperly presented their claim of a fraud upon the court under Civ.R. 60(B)(3), instead of Civ.R. 60(B)(5). Mr. Runyon further argues that Mr. Hawley and Hawley Motors, L.L.C. “failed to offer any evidence that would establish fraud as contemplated by either [Civ.R. 60(B)(3) or (B)(5)]” and instead their allegations of fraud “‘amounted to a claim or defense in the case’ and is not cognizable under [Civ.R.] 60(B)(3).” None of these arguments are properly before this Court. A review of Mr.
Runyon’s brief in opposition to the motion to vacate reflects that he did not put forth any of these
arguments to the trial court. “Arguments that were not raised in the trial court cannot be raised
for the first time on appeal.”
Burden
,
argument to the trial court, the trial court did not address that argument. Instead, the trial court vacated the default judgment solely on the issue of service. In light of the absence of a ruling by the trial court as to fraud, the record does not support Mr. Runyon’s claimed error. Mr. Runyon’s second assignment of error is overruled.
III. Mr. Runyon’s assignments of error are overruled. The judgment of the Lorain
County Court of Common Pleas is affirmed.
Judgment affirmed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Lorain, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellant.
LYNNE S. CALLAHAN FOR THE COURT TEODOSIO, P. J.
CARR, J.
CONCUR.
APPEARANCES:
JONATHAN E. ROSENBAUM, Attorney at Law, for Appellant.
BARRY R. MURNER, Attorney at Law, for Appellees.
Notes
[1] “[W]here service of process has not been accomplished, any judgment rendered is void ab initio .” Sampson v. Hooper Holmes, Inc. , 91 Ohio App.3d 538, 540 (9th Dist.1993), citing Rondy v. Rondy , 13 Ohio App.3d 19, 22 (9th Dist.1983). The authority to vacate a void judgment arises from the inherent power possessed by Ohio courts, and not Civ.R. 60(B). Patton v. Diemer , 35 Ohio St.3d 68 (1988), paragraph four of the syllabus. The Civ.R. 60(B) requirements are not applicable when a party asserts the trial court lacked personal jurisdiction because of improper service of process. First Merit Bank, N.A. v. Wood , 9th Dist. Lorain No.