You Can’t Crash the Party When You Already Received an Invitation

The 8th District Business Blog reviews recent decisions by the Ohio 8th District Court of Appeals related to civil matters that could affect business owners, plaintiffs, or defendants.

Citizens Bank, N.A. et al. vs. Abraham David, et al.

No. 106575, 2018-Ohio-3676

Trial Court Case No. CV-15-855258

The 8th District recently affirmed Judge Sherrie Midday’s denial of Defendant Frederick Harris’ Motion to intervene in a foreclosure case.

Plaintiff Citizens Bank named Harris as a co-defendant because the bank thought he had or may claim an interest in the property at issue in the case. Citizens was foreclosing on the property after the primary defendant, Abraham David, defaulted on a home equity line of credit agreement.

In terms of the procedure posture of the case, Harris was served with the Complaint via regular U.S. Mail after service by Federal Express and certified mail was returned as “unclaimed.” (See Ohio Civ. R. 4.6). Thereafter, Harris failed to respond to the lawsuit and a default judgment was issued, foreclosing any interest he had in the property.

Harris failed to file a timely appeal, but then he filed an Ohio Civ. R. 60(B) motion for relief from judgment claiming: (i) he did not receive service of the Complaint and (ii) he had an interest in the property. Harris also sought leave to plead. Judge Midday denied both motions, and again, Harris failed to file a timely appeal.

Instead, Harris decided to take a second crack at filing a Rule 60 motion on the eve the sheriff’s sale. H also filed a motion to reconsider. In denying Harris’ motions, the trial court held:

(i)        Harris was never a named defendant and needed to intervene before filing his motions;

(ii)       His proper relief was to appeal the trial court’s denial of his first Rule 60 motion; and

(iii)      Harris failed to plead operative facts showing he had a meritorious defense even if he was granted relief from the judgment.

Harris, who was already a defendant in the case, then filed an Ohio Civ. R. 24 motion to intervene, which the trial court subsequently denied. Then, Harris finally took the plunge and filed an appeal in the 8th District.

In affirming the trial court’s denial of Harris’ Motion to Intervene, the Court began by noting Rule 24 governs a non-party’s right to intervene in an action. “In this case, Harris moved to intervene in a case in which he was already a named party defendant who was subject to a default judgment entered in May 2017.” Id. at ¶ 8. “Admittedly, the trial court incorrectly stated that Harris was not a ‘defendant’ in its journal entry denying Harris’s second motion for relief from the judgment.” The Court said the error did not warrant reversal. “If Harris wished to defend his interest in this matter, he should have appealed to this court after the trial court denied his first Civ.R. 60(B) motion for relief from judgment.” Id.

There are several morals to this story:

• It is important to seek legal counsel as soon as you receive notice of a pending lawsuit. By law, defendants only have a limited amount of time (28 days) to file an answer or otherwise respond to a lawsuit after they are served. Otherwise, the defendant may face a default judgment, which is extremely difficult to overturn.

• When a party is seeking Rule 60(B) relief, they must allege operative facts showing they could assert a meritorious defense if the court grants the relief requested. It is not enough to simply complain that you did not have your day in court. A party has to have a potential meritorious defense or the trial court will not grant relief from judgment.

• After a trial court issues a judgment, the parties only have 30 days to file a notice of appeal. Therefore, it is extremely important to stay informed regarding the status of the case and when significant rulings are handed down.

Scott Heasley is a litigation and business attorney at Meyers, Roman, Friedberg & Lewis. If you have questions regarding legal matters affecting you or your business, Scott can be reached at sheasley@meyersroman.com or here.