Dispatch Printing Co. v. Recovery Ltd. P'ship

• Decision Date: 07 April 2015
• Docket Number: 14AP–642.,14AP–641,Nos. 14AP–640,s. 14AP–640
• Citation: 31 N.E.3d 190
• Parties: The DISPATCH PRINTING COMPANY et al., Plaintiffs–Appellees, v. RECOVERY LIMITED PARTNERSHIP et al., Defendants–Appellees, (Robert M. Hoffman, Appellant). The Dispatch Printing Company et al., Plaintiffs–Appellees, v. Gilman D. Kirk et al., Defendants–Appellees, (Robert M. Hoffman, Appellant). Michael H. Williamson et al., Plaintiffs–Appellees, v. Recovery Limited Partnership et al., Defendants–Appellees, (Robert M. Hoffman, Appellant).
• Court: Ohio Court of Appeals

31 N.E.3d 190

The DISPATCH PRINTING COMPANY et al., Plaintiffs–Appellees

v.RECOVERY LIMITED PARTNERSHIP et al., Defendants–Appellees

(Robert M. Hoffman, Appellant).

The Dispatch Printing Company et al., Plaintiffs–Appellees

v.Gilman D. Kirk et al., Defendants–Appellees

(Robert M. Hoffman, Appellant).

Michael H. Williamson et al., Plaintiffs–Appellees

v.Recovery Limited Partnership et al., Defendants–Appellees

(Robert M. Hoffman, Appellant).

Nos. 14AP–640

14AP–641

14AP–642.

Court of Appeals of Ohio, Tenth District, Franklin County.

April 7, 2015.

Anspach Meeks Ellenberger LLP, and James S. Savage, Toledo, for appellees.

Golden & Meizlish Co., L.P.A., Keith E. Golden and Adam H. Karl, Columbus, for appellant.

Opinion

TYACK

, J.

{¶ 1} Robert M. Hoffman is appealing from the Franklin County Court of Common Pleas' order which vacated the entry granting Hoffman's motion for leave to file a proof of claim instanter and which denied his motion for leave to file a proof of claim instanter. For the following reasons, we reverse the trial court's decision denying leave to file a proof of claim instanter.

{¶ 2} Hoffman presents one assignment of error:

THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN IT DENIED ROBERT M. HOFFMAN'S MOTION FOR LEAVE TO FILE PROOF OF CLAIM INSTANTER.

{¶ 3} Hoffman filed a “Motion for Leave to File Proof of Claim Instanter” on June 27, 2014. The trial court initially granted this motion but then later denied it and vacated its earlier entry. The trial court reasoned that Hoffman failed to submit a claim by the claim bar date of January 7, 2014 and was unable to demonstrate excusable neglect for failing to do so. Hoffman timely appealed this decision.

{¶ 4} This case involves the golden hoard of a sunken treasure ship. During a hurricane in 1857, the SS Central America sank off the coast of South Carolina carrying hundreds of passengers and several tons of gold. Columbus–America Discovery Group v. Atlantic Mut. Ins. Co., 974 F.2d 450 (4th Cir.1992)

. The sinking of the SS Central America is one of the worst disasters in American maritime history and further exasperated the economic state of this nation after the Panic of 1857 as the ship was carrying treasures to New York on the last leg of a journey from the gold fields of California. Id.

{¶ 5} Recovery Limited Partnership (“RLP”) was formed in 1985 as an entity to help finance an expedition for the discovery and subsequent recovery of gold on the SS Central America. After the wreck's discovery in 1987, gold and other artifacts were recovered over the next four years. The U.S. District Court for the Eastern District of Virginia in a maritime action, established ownership of the wreck and its contents, ruling that Columbus–America Discovery Group, as an agent of RLP, owned 92.5 percent of the wreck and its contents.

{¶ 6} Columbus Exploration, LLC was formed to address the concerns of some of the investors in RLP. The Franklin County Court of Common Pleas placed RLP and Columbus Exploration into receivership. The receiver compiled a list of the receivership assets including the rights of RLP as salvor in possession of the SS Central America. The receiver also retained experts, identified claimants, moved to publish notification to unknown claimants, and set a claim bar date. The receiver identified 86 possible claimants who were all sent letters. After publications in the Columbus Dispatch and the Southeastern edition of the Wall Street Journal on November 20 and 27, 2013, a claim-bar date of December 20, 2013 was established by the trial court. The date was eventually extended a few weeks to January 7, 2014.

{¶ 7} Hoffman claimed he became aware of the receiver's actions after the claim bar date had passed. Hoffman eventually moved to file a proof of claim instanter. Hoffman claims that as payment for legal services he provided to RLP in the 1980's, he is entitled to “receive an interest of 1.5% of the net recovery in consideration for both past and future business consulting services and for previous legal work performed in connection with the expedition.” (July 7, 1985 Letter from Hoffman to Thomas Thompson.) Hoffman offers, among other proof, a letter between himself and Thomas Thompson who was at the center of the gold recovery effort.

{¶ 8} The Supreme Court of Ohio has held that R.C. 2735.04

enables a trial court to exercise its discretion to limit or expand a receiver's powers. State ex rel. Celebrezze v. Gibbs, 60 Ohio St.3d 69, 573 N.E.2d 62 (1991) ; Wells Fargo Bank, N.A. v. Odita, 10th Dist. No. 13AP–663, 2014-Ohio-2540, 2014 WL 2612673, ¶ 15. “Absent a showing that the trial court has abused that discretion, a reviewing court will not disturb the trial court's judgment.” Id. “The term ‘abuse of discretion’ connotes more than an error of law or judgment; it implies that the court's attitude is unreasonable, arbitrary or unconscionable.” Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983). An abuse of discretion implies a decision that is arbitrary or capricious, one that is without a reasonable basis or clearly wrong. Pembaur v. Leis, 1 Ohio St.3d 89, 437 N.E.2d 1199 (1982)

; In re Ghali, 83 Ohio App.3d 460, 615 N.E.2d 268 (10th Dist.1992).

{¶ 9} Hoffman argues that the receiver failed to provide reasonable opportunity for unknown creditors to present and prove their claims. Hoffman claims excusable neglect, because the notice in the newspapers was insufficient and highly unlikely to provide notice to unknown claimants.

{¶ 10} The general duties of a receiver include: giving notice to all known creditors of the receiver's appointment, affording “reasonable opportunity for creditors to present and prove their claims, and, if deemed appropriate by the receiver or the court, publish in a newspaper of general circulation within the County a deadline or bar date for submitting claims.” Loc.R. 66.05 of the Court of Common Pleas of Franklin County. The duties also include determining the validity and priority of creditor's claims. The trial court found that the published notice had sufficient content and was published in a manner very reasonably calculated to inform the alleged creditors. The trial court reasoned that Hoffman's failure to view the notice was not excusable neglect. We examine whether the trial court abused its discretion in this determination.

{¶ 11} “[T]he concept of ‘excusable neglect’ must be construed in keeping with the proposition that Civ.R. 60(B)(1)

is a remedial rule to be liberally construed, while bearing in mind that Civ.R. 60(B) constitutes an attempt to ‘strike a proper balance between the conflicting principles that litigation must be brought to an end and justice should be done.’ ” Colley v. Bazell, 64 Ohio St.2d 243, 248, 416 N.E.2d 605 (1980). In determining whether excusable or inexcusable neglect has occurred, a court “ ‘must of necessity take into consideration all the surrounding facts and circumstances.’ ” Griffey v. Rajan, 33 Ohio St.3d 75, 514 N.E.2d 1122 (1987), quoting Colley at 249, 416 N.E.2d 605 ; Porter, Wright, Morris & Arthur, LLP v. Frutta Del Mondo, Ltd., 10th Dist. No. 08AP–69, 2008-Ohio-3567, 2008 WL 2779511. “Excusable neglect” is defined in the negative and inaction of the party is not “excusable neglect” if it can be labeled as a “complete disregard for the judicial system.” Kay v. Marc Glassman, Inc., 76 Ohio St.3d 18, 665 N.E.2d 1102 (1996), quoting GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St.2d 146, 351 N.E.2d 113 (1976). Attorney's conduct falling “substantially below what is reasonable under the circumstances,” constitutes inexcusable neglect. GTE Automatic Elec. at 152, 351 N.E.2d 113. Although a movant is not required to support its motion with evidentiary materials, the movant must do more than make bare allegation that he or she is entitled to relief. Kay, supra.

{¶ 12} The Ohio Fourth Appellate District has summarized a number of cases showing what factors and circumstances do and do not constitute excusable neglect. Vanest v. Pillsbury Co., 124 Ohio App.3d 525, 706 N.E.2d 825 (4th Dist.1997)

. Though the case is nearly two decades old, the general principals and case examples given remain true.

{¶ 13} First, most cases finding excusable neglect also have found special circumstances that justify the neglect: Kay (attorney did not file answer timely due to office reorganization); Colley (by properly post-marked letter, attorney referred matter to insurance carrier notifying carrier that action was required within 28 days; the letter was lost in mail); Perry v. Gen. Motors Corp., 113 Ohio App.3d 318, 680 N.E.2d 1069 (10th Dist.1996)

(a corporate employee sent the complaint to wrong department, thus preventing proper corporate official from responding to complaint prior to entry of default judgment); McGee v. C & S Lounge, 108 Ohio App.3d 656, 671 N.E.2d 589 (10th Dist.1996) (confusion created between insurance carrier and defendant resulted in default judgment rendered against defendant); Bluffs of Wildwood Homeowners' Assn., Inc. v. Dinkel, 96 Ohio App.3d 278, 644 N.E.2d 1100 (12th Dist.1994) (personal and family illness may constitute excusable neglect); Hopkins v. Quality Chevrolet, Inc., 79 Ohio App.3d 578, 607 N.E.2d 914 (4th Dist.1992) (failure to deliver complaint and summons to proper corporate authority may constitute excusable neglect); Mid–America Acceptance Co. v. Lightle, 63 Ohio App.3d 590, 579 N.E.2d 721 (10th Dist.1989) (attorney, who was in the process of changing secretaries, had received notice of trial date, but the staff failed to note the date on the calendar); Gen. Motors Acceptance Corp. v. Deskins, 16 Ohio App.3d 132, 474 N.E.2d 1207 (8th Dist.1984) (plaintiff's reliance upon defense counsel's statement to “forget it” (the complaint) constitutes excusable neglect); Brenner v. Shore, 34 Ohio App.2d 209, 211, 297 N.E.2d 550 (10th Dist.1973) (severe emotional strain resulting in hospitalization for “complete physical and mental collapse”)...