[Cite as Provenzano v. Yarnish, 2016-Ohio-7181.]
STATE OF OHIO, BELMONT COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
LORI A. PROVENZANO ) CASE NO. 14 BE 0042
)
PLAINTIFF-APPELLANT )
)
VS. ) OPINION
)
MORA YARNISH, et al. )
)
DEFENDANTS-APPELLEES )
CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common
Pleas of Belmont County, Ohio
Case No. 12 CV 0439
JUDGMENT: Affirmed.
APPEARANCES:
For Plaintiff-Appellant: Atty. Theodore L. Tsoras
Tsoras Law Office
P.O. Box 150
54491 Lysien Road
Powhatan Point, Ohio 43942
For Defendants-Appellees: Atty. Douglas K. Fifner
Douglas K. Fifner Co. LPA
24441 Detroit Road #300
Westlake, Ohio 44145
JUDGES:
Hon. Cheryl L. Waite
Hon. Gene Donofrio
Hon. Carol Ann Robb
Dated: September 30, 2016
[Cite as Provenzano v. Yarnish, 2016-Ohio-7181.]
WAITE, J.
{¶1} Appellant Lori A. Provenzano appeals an August 26, 2014 decision of
the Belmont County Court of Common Pleas vacating its November 21, 2013 default
judgment entry against Appellee Western United Insurance Co. (“Western United”).
Two co-defendants, Mora A. Yarnish and Joseph Yarnish, were previously dismissed
and are not involved in this appeal. Appellant argues that she properly obtained
service on Western United because the company’s statutory agent accepted service
on its behalf by signing the certified mail return receipt instead of rejecting service,
thus the trial court erroneously vacated judgment. Appellant also argues that the trial
court improperly refused to strike Western United’s sur-reply brief in which it raised a
Civ.R. 60(B) argument for the first time. For the reasons provided, Appellant’s
arguments are without merit and the judgment of the trial court is affirmed.
Factual and Procedural History
{¶2} On October 6, 2010, Appellant was injured as a result of a car accident.
The other driver was Mora Yarnish. At the time of the accident, Appellant had
$50,000/$100,000 insurance limits plus UI/UIM insurance through Western United.
On September 27, 2012, Appellant filed a complaint against Western United, Yarnish,
and Yarnish’s husband. For reasons not explained in the record, five months then
elapsed. On April 1, 2013, the Clerk of Courts served the summons and complaint
on CT Corporation System (“CT”), Western United’s statutory agent. The summons
and complaint, however, named Western Union as a party defendant instead of
Western United. The summons and complaint were subsequently returned to
Appellant along with a letter from CT stating that Western Union was not listed on
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their record as a client. Appellant filed an amended complaint on April 9, 2013, this
time accurately naming Western United as the defendant. Although the amended
complaint correctly named Western United, the envelope and summons still were
addressed to Western Union. The amended complaint was served on CT on April
17, 2013.
{¶3} Subsequently, CT sent Appellant’s attorney a second rejection letter
stating “n/a is not listed on our records or on the records of the State of OH.”
However, in the reference section of the letter, the following appeared: “Re: Lori A.
Provenzano, Pltf. vs. Mora A. Yarnish, et. al. including Western United Insurance
Company, etc., Dfts.” (Emphasis added.) (4/16/13 Rejection Letter.) Western
United did not file an answer to the amended complaint.
{¶4} On November 21, 2013, Appellant voluntarily dismissed Mora Yarnish
after the parties settled for the full policy limits of $100,000. Yanrish’s husband was
later voluntarily dismissed. The trial court also granted Appellant’s motion for default
judgment against Western United. After a damages hearing, the trial court entered a
$729,796.96 judgment against Western United. Appellant’s counsel sent Western
United’s counsel a motion for pretrial interest, which then alerted Western United to
the existence of the lawsuit.
{¶5} On July 25, 2014, Western United filed a motion to vacate the default
judgment. The trial court held a hearing on August 25, 2014. The trial court
determined that Western United was not properly served and did not receive notice of
the complaint based on CT’s failure to forward the complaint to Western United. The
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trial court vacated the default judgment on this basis. The court ruled that Western
United, having now made an appearance, was a party defendant moving forward.
This timely appeal followed. On September 22, 2014, the trial court dismissed
Appellant’s amended complaint pursuant to Civ.R. 12(B)(6). The Civ.R. 12(B)(6)
dismissal is not the subject of this appeal.
{¶6} Appellant raises three assignments of error on appeal. For ease of
understanding, Appellant’s assignments of error are discussed slightly out of order.
FIRST ASSIGNMENT OF ERROR
THE TRIAL COURT'S FINDING THE APPELLEE WAS NOT SERVED
WITH THE AMENDED COMPLAINT WAS AN ABUSE OF
DISCRETION.
{¶7} “[S]ervice of the summons and complaint required to initiate a lawsuit
must satisfy ‘[a]n elementary and fundamental requirement of due process,’ which is,
‘notice 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.’ ” Spotsylvania Mall Co. v. Nobahar, 7th Dist. No. 11 MA 82, 2013-Ohio-
1280, ¶ 17, citing Samson Sales, Inc. v. Honeywell, Inc., 66 Ohio St.2d 290, 293, 421
N.E.2d 522 (1981); Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314,
70 S.Ct. 652, 94 L.Ed. 865 (1950). “[U]nless service has been properly made or the
party has otherwise waived service by appearing in the lawsuit, no judgment may be
entered against him.” Spotsylvania at ¶ 20. A trial court’s decision to vacate a
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judgment is reviewed for an abuse of discretion. Ross v. Olsavsky, 7th Dist. No. 09
MA 95, 2010-Ohio-1310, ¶12
{¶8} Appellant contends that the trial court abused its discretion in finding
that Western United was not properly served with the April 9, 2013 amended
complaint. Appellant argues that a presumption of proper service is created when
service is directed to the appropriate statutory agent and is “reasonably calculated” to
reach the intended party. Here, Appellant argues that service was directed to CT,
Western United’s statutory agent, where it was reasonably calculated to reach
Western United. Appellant urges that Western United has failed to produce any
evidence to rebut this presumption. Appellant concedes that when the second
attempted service was made, the summons and envelope erroneously were
addressed to the business entity Western Union. However, Appellant argues that the
amended complaint was sufficient to place CT on notice that service was directed at
Western United. Appellant argues that this is supported by CT’s mention of Western
United in the reference section of its rejection letter. Regardless, Appellant argues
that CT failed to properly reject service and admittedly signed the certified mail return
receipt for service.
{¶9} In response, Western United asserts that the rebuttable presumption
only arises when service complies with the Ohio Rules of Civil Procedure, which did
not occur in this case. Western United argues that the summons and envelope for
the amended complaint was addressed to the business known as Western Union, not
to Western United. Even if the rebuttable presumption applied, here, Western United
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argues that the evidence, which includes Mr. Wright’s testimony and the court’s
docket, is sufficient to defeat the presumption. As CT serves as the statutory agent
for hundreds of companies, Western United argues that it is impractical to place the
burden on them to search through the body of the amended complaint, which often
includes numerous defendants, in order to determine if any party to the suit is a CT
client.
{¶10} Generally, “ ‘a trial court is without jurisdiction to render a judgment or
to make findings against a person who was not served summons, did not appear,
and was not a party in the court proceedings,’ and ‘[a] person against whom such
judgment and findings are made is entitled to have the judgment vacated.’ ” Taylor v.
Herring, 7th Dist. No. 12 CO 49, 2014-Ohio-5638, ¶ 9, quoting State ex rel. Ballard v.
O'Donnell, 50 Ohio St.3d 182, 184, 553 N.E.2d 650 (1990).
{¶11} Civ.R. 4.2(F) allows service “[u]pon a corporation either domestic or
foreign: by serving the agent authorized by appointment or by law to receive service
of process; or by serving the corporation at any of its usual places of business by a
method authorized under Civ.R. 4.1(A)(1); or by serving an officer or a managing or
general agent of the corporation.”
{¶12} “[A] party who asserts that the court lacked personal jurisdiction over
the party because service of process was not proper need not establish the
requirements of Civ.R. 60(B).” Kostoglou v. D&A Trucking & Excavating, Inc., 2007-
Ohio-3399, ¶ 17, citing United Home Fed. v. Rhonehouse, 76 Ohio App.3d 115, 123,
601 N.E.2d 138 (6th Dist.1991). This is because “[a] court has the inherent power to
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vacate a void judgment.” Williams at *3, citing Patton v. Diemer, 35 Ohio St.3d 68,
518 N.E.2d 941 (1988), paragraph four of the syllabus.
{¶13} Here, service on Western United was attempted twice. It is undisputed
by both parties that the first attempt at service was improper. The dispute arises as
to whether the second attempt was proper. When the second attempt at service
reached CT, the amended complaint correctly named Western United as the
defendant. However, the summons and envelope were still incorrectly addressed to
Western Union.
{¶14} We begin with the presumption that service is proper when it is
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.” Mitchell v. Mitchell, 64 Ohio St.2d 49, 51, 413 N.E.2d 1182 (1980), citing
Mullane, supra. In examining the circumstances here, we first look to the service
documents. Western United argues that CT does not read the actual amended
complaint when directing service, but concedes that CT’s April 16, 2013 rejection
letter included a referenced to Western United. From this, it is reasonable to assume
that CT was at least generally aware that Appellant was attempting to serve Western
United.
{¶15} In addition to mentioning the correct party in the rejection letter, a CT
employee signed the certified mail return receipt. Pursuant to Civ.R. 4.1(A), “service
of process via certified mail is evidenced by a return receipt signed by any person.”
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(Emphasis deleted.) Ross, supra, ¶ 13. As such, the return receipt, here, is certainly
evidence of service on CT.
{¶16} Finally, we look to CT’s actions in rejecting service. Pursuant to Civ.R.
4.6(C),
If attempted service of process by United States certified or express
mail * * * within or outside the state is refused, and the certified or
express mail envelope * * * shows such refusal * * * the clerk shall
forthwith notify the attorney of record or, if there is no attorney of record,
the party at whose instance process was issued and enter the fact and
method of notification on the appearance docket.
{¶17} Here, CT did not mark “refused” on the envelope. Instead, CT wrote a
letter to Appellant rejecting service. Appellant admits she received this letter, but
notes that the reference section correctly mentioned Western United. The court’s
docket also reflected that CT signed the return receipt for service and did not show
refusal of service. Based on this, Appellant argues that Western United failed to
properly reject service. However, Civ.R. 4.6(C) does not mandate that the only
means to reject service is to refuse to sign for certified mail and mark refused on the
envelope. Looking at the language of the rule, it says essentially that if “the certified
* * * envelope * * * shows such refusal” the clerk “shall” notify the party or their
counsel. It does not, however, explicitly state that this MUST be done in order to
properly reject service. While certainly such refusal is the best practice, eliminating
the confusion created here because the clerk’s office had no indication that service
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was, in fact, refused, it does not appear that the rule limits refusal of service only to
this procedure. Arguably, the person CT has assigned to its intake desk and who
signs for mail on behalf of hundreds of CT clients probably should check a client list
before signing for certified mail, but it is not inconceivable that a clerk may not do so,
necessitating the later form letters that CT utilized to return both attempts at service
to Appellant. Because the rule does not clearly restrict refusal of service to only the
methods contained in the rule and because service was clearly directed to Western
Union, we cannot say that service on Western United was perfected. Hence, we find
no merit in Appellant’s first assignment.
{¶18} Alternatively, the trial court additionally granted Western United’s
motion based on Civ.R. 60(B) grounds. Because this record reflects ambiguities on
the issue of service, we will address the Civ.R. 60(B) concerns.
THIRD ASSIGNMENT OF ERROR
THE TRIAL COURTS DENYING APPELLANT'S MOTION TO STRIKE
APPELLEE'S REPLY BRIEF WAS AN ABUSE OF DISCRETION.
{¶19} Appellant claims here that Western United’s request for Civ.R. 60(B)
relief was not properly raised. Before we can address the merits of the trial court’s
decision to vacate, we must first address this threshold question.
{¶20} Appellant contends that Western United raised its Civ.R. 60(B)
argument for the first time within its sur-reply brief. Because the argument was not
raised in Western United’s original brief, Appellant argues that the trial court
erroneously failed to strike Western United’s sur-reply brief. Appellant argues that
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this error was compounded because not only did Western United fail to raise Civ.R.
60(B) arguments in its initial brief, it did not file its sur-reply brief until 3:10 p.m. on the
Friday before the following Monday’s 8:30 a.m. scheduled hearing, leaving Appellant
with insufficient time to address this issue.
{¶21} In response, Western United argues that it raised its Civ.R. 60(B)
arguments within its initial brief. Additionally, the trial court informed the parties that it
intended to hold a “full-scale evidentiary hearing” and wanted to hear all arguments
based on fundamental fairness, thus used its discretion in accepting the sur-reply
brief. (Appellee’s Brf., p. 27.)
{¶22} “The determination of a motion to strike is vested within the broad
discretion of the court.” In re J.H., 7th Dist. No. 10 JE 15, 2011-Ohio-6536, ¶ 30,
citing State ex rel. Morgan v. New Lexington, 112 Ohio St.3d 33, 2006-Ohio-6365,
857 N.E.2d 1208, ¶ 26. As such, a trial court’s decision on a motion to strike will not
be disturbed unless an abuse of that discretion is shown. Id.
{¶23} Western United correctly notes that its Civ.R. 60(B) arguments were
raised in its original brief. Although Western United’s primary arguments were
centered on a trial court’s inherent ability to vacate a judgment, Western United did
raise Civ.R. 60(B) arguments in its original brief. The trial court had discretion to
accept Western United’s sur-reply brief and there is nothing within this record to allow
us to find that the trial court acted unreasonably, arbitrarily, or unconscionably.
Accordingly, Appellant’s third assignment of error is without merit and is overruled.
SECOND ASSIGNMENT OF ERROR
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THE TRIAL COURT'S GRANTING OF APPELLEE'S MOTION TO
VACATE AND SET ASIDE DEFAULT JUDGMENT WAS AN ABUSE
OF DISCRETION.
{¶24} Appellant contends that Western United failed to demonstrate that it
was entitled to relief under any of the Civ.R. 60(B) categories. As Civ.R. 60(B)(2),
(3), (4) are inapplicable, Western United was required to present evidence that it was
entitled to relief pursuant to Civ.R. 60(B)(1) or (B)(5). Appellant argues that Civ.R.
60(B)(1) does not apply, here, as CT’s insufficient or negligent internal policies do not
demonstrate mistake, inadvertence, surprise, or excusable neglect. Appellant
additionally argues that Western United cannot show that it did not receive notice of
the lawsuit, thus cannot succeed under Civ.R. 60(B)(5).
{¶25} Western United responds by arguing that it was entitled to relief
pursuant to Civ.R. 60(B)(1), (3) and (5). As to Civ.R. 60(B)(1), Western United
argues that its statutory agent’s handling of the service is attributable to excusable
neglect. In regard to Civ.R. 60(B)(3), Western United argues that Appellant’s
$729,000 default judgment is well above the policy limit of $50,000, thus was
fraudulently obtained. Western United explains that Appellant settled her claims
against co-defendant Yarnish for $100,000 and Appellant was only entitled to
UM/UIM payment if Yarnish was uninsured, underinsured, or did not have liability
limits in excess of Appellant’s UM/UIM coverage. Thus, Western United argues that
Appellant is not entitled to any recovery, but even if she were, she is limited to
$50,000. Finally, Western United contends that it is entitled to relief pursuant to
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Civ.R. 60(B)(5) based on fundamental fairness. Citing Rafalski v. Oates, 17 Ohio
App.3d 65, 477 N.E.2d 1212 (8th Dist.1984), Western United argues that failure of
service has been held to be a reason for relief pursuant to Civ.R. 60(B)(5).
{¶26} Pursuant to Civ.R. 55(B), a court is empowered to set aside a default
judgment in accordance with Civ.R. 60(B).
To prevail on a motion brought under Civ. R. 60(B), the movant must
demonstrate that: (1) the party has a meritorious defense or claim to
present if relief is granted; (2) the party is entitled to relief under one of
the grounds stated in Civ. R. 60(B)(1) through (5); and (3) the motion is
made within a reasonable time, and, where the grounds of relief are
Civ. R. 60(B)(1), (2), or (3), not more than one year after the judgment,
order or proceeding was entered or taken.
GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St.2d 146, 351 N.E.2d
113, paragraph two of the syllabus. Appellant concedes that the sole issue, here, is
whether Western United is entitled to relief under one of the grounds stated in Civ.R
60(B)(1) through (5).
{¶27} To be entitled to relief pursuant to Civ.R. 60(B)(1), Western United was
required to show mistake, inadvertence, surprise, or excusable neglect. Courts have
defined the elusive concept of excusable neglect in the negative: “neglect is not
excusable if it represents complete disregard for the judicial system.” WFMJ
Television, Inc. v. AT&T Fed. Systems CSC, 7th Dist. No. 01 CA 69, 2002-Ohio-
3013, ¶ 17. A reviewing court must take into consideration all surrounding facts and
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circumstances. Id. A trial court’s ruling on a Civ.R. 60(B) motion is reviewed for an
abuse of discretion. Norman v. Hanoverton Motor Cars, Inc., 7th Dist. No. 11 CO 13,
2012-Ohio-2697, ¶ 16. “[W]hen determining whether a court’s decision is
unreasonable, we must look at whether there is a sound reasoning process that
would support the decision. Id. at ¶ 31.
{¶28} We have already determined that Appellant did not obtain proper
service on Western United. However, it is apparent that Western United’s agent, CT,
had some idea that the suit, while addressed to Western Union, was aimed at
Western United. Based on this, Appellant believes that CT had a duty to forward her
complaint to Western United. We have previously addressed the issue of whether
the failure of an employee to forward a complaint to the proper person constitutes
excusable neglect in a series of cases. In WFMJ, supra, the plaintiff mailed a
complaint to the defendant’s mailroom; however, the employees in that room failed to
forward the complaint to the appropriate person. After the defendant failed to file an
answer, the trial court granted the plaintiff’s motion for default judgment. While
acknowledging that the failure of an employee to forward a complaint to the proper
person “teeters on the verge of inexcusable neglect,” we recognized that the trial
court has wide discretion in such matters and affirmed the court’s finding of
excusable neglect. Id. at ¶ 22.
{¶29} In 2007, we again addressed the issue in Benesch, Friedlander,
Coplan, and Arnoff v. City Concrete, 7th Dist. No. 06 MA 95, 2007-Ohio-3331. In
Benesch, the plaintiff sent the complaint to the defendant’s place of business and it
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was signed for by a temporary employee of a company that shared office space with
the defendant. The complaint was not forwarded to anyone in defendant’s company,
but the president of the defendant’s company was informed about the complaint.
The court granted the plaintiff’s motion for default judgment and, later, denied the
defendant’s Civ.R. 60(B) motion. We held that, although the failure to forward a
complaint to the proper person could be excusable neglect, the trial court did not
abuse its discretion when it held there was no excusable neglect because the
appropriate party had knowledge that the complaint had been received.
{¶30} More recently, we addressed the issue in Norman, supra. In Norman,
the defendant’s office manager signed the return receipt for the complaint, but lost it
while rearranging office furniture. Consequently, the defendant failed to answer the
complaint. The trial court granted the plaintiff’s motion for default judgment. We
affirmed the trial court’s finding of inexcusable neglect and noted that “there is a fine
line between excusable and inexcusable neglect and the courts, including this court,
must defer to the trial court’s determination on whether the neglect is excusable given
our abuse of discretion standard of review.” Id. at ¶ 27.
{¶31} Here, the trial court found Western United’s neglect through its agent
CT, if any, to be excusable given the confusion surrounding both service attempts.
The court further explained that it is impracticable to require a statutory agent who
represents hundreds of clients to analyze every pleading and determine to which
client service is directed when the correct name does not appear on the envelope or
the summons. As the trial court was well within its discretion in so ruling based on
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the facts of this matter, we defer to the trial court’s decision. Accordingly, Appellant’s
second assignment of error is without merit and is overruled.
Conclusion
{¶32} While Western United’s statutory agent did not strictly follow the Civil
Rules in rejecting service, the manner in which they did reject service cannot be said
to be unlawful, as the rules do not mandate only one type of rejection. Despite the
fact that the statutory agent rejected service of the amended complaint, it is clear
from the record that the agent had some idea as to the correct party Appellant was
trying to serve. Despite this, the trial court was within its power to grant a motion to
vacate by Western United, who was never notified of the attempts at service.
Accordingly, the judgment of the trial court is affirmed.
Donofrio, P.J., concurs.
Robb, J., concurs.