Internatl. Lottery, Inc. v. Kerouac

• Citation: 657 N.E.2d 820,102 Ohio App.3d 660
• Decision Date: 26 April 1995
• Docket Number: No. C-930920,C-930920
• Parties: INTERNATIONAL LOTTERY, INC., Appellee, v. KEROUAC, Appellant.
• Court: United States Court of Appeals (Ohio)

Page 660

102 Ohio App.3d 660

657 N.E.2d 820

INTERNATIONAL LOTTERY, INC., Appellee, v. KEROUAC, Appellant.

No. C-930920.

Court of Appeals of Ohio,

First District, Hamilton County.

Decided April 26, 1995.

Taft, Stettinius & Hollister and Russell S. Sayre, Cincinnati, for appellee.

Stephen R. Felson and James J. Chalfie, Cincinnati, for appellant.

GORMAN, Judge.

The defendant-appellant, Armand R. Kerouac, Jr., appeals from the trial court's order of November 17, 1993, which overruled his motion for relief from the judgment entered against him on March 4, 1993. ¹ In his two assignments of error, Kerouac contends that (1) the trial court lacked subject-matter jurisdiction, and (2) the trial court abused its discretion by overruling his motion for relief from judgment under Civ.R. 60(B). For the reasons set forth below, the judgment of the trial court is affirmed in part and reversed with respect to the award of attorney fees.

On June 26, 1992, the plaintiff-appellee, International Lottery, Inc. ("International"), filed a complaint against Kerouac in common pleas court, seeking the specific performance of a stock repurchase agreement, a declaratory judgment concerning the parties' obligations under a consulting agreement, and attorney fees. On August 18, 1992, James C. Dragon, an attorney from Massachusetts, filed a petition on behalf of Kerouac to remove the case to federal district court. Dragon subsequently mailed an answer and counterclaim to the clerk of the common pleas court, which was docketed on October 20, 1992. He filed the answer and counterclaim again on November 27, 1992. Although no order appears of record, it is undisputed that at some point during the proceedings, the district court remanded the case to the common pleas court.

On February 2, 1993, International's counsel, in compliance with Civ.R. 5, mailed Dragon a notice that the case was set for trial or default on March 4, 1993, in common pleas court. On March 4, 1993, in the absence of Dragon or Kerouac, the trial court entered judgment against Kerouac on the complaint and awarded International $4,900 in attorney fees. That judgment was not appealed.

On August 17, 1993, Kerouac's present counsel entered his appearance for Kerouac and filed a motion for relief from judgment pursuant to Civ.R. 60(B)(1). On November 17, 1993, the trial court overruled Kerouac's motion. Kerouac filed a notice of appeal on December 2, 1993. While the appeal was pending, Kerouac filed a second Civ.R. 60(B) motion in the trial court. This court remanded the case to the trial court for disposition of the second motion with instructions to the trial court to file a supplemental record. On April 19, 1994, the trial court overruled Kerouac's second Civ.R. 60(B) motion. Kerouac did not appeal this order. Therefore, appellate review is limited to the trial court's order of November 17, 1993, which overruled Kerouac's first Civ.R. 60(B) motion.

A. SUBJECT-MATTER JURISDICTION

In his first assignment of error, Kerouac contends that the absence of the district court's remand order on the common pleas court's docket indicated that the clerk of the district court did not mail a certified copy to the clerk of the common pleas court as required by Section 1447(c), Title 28, U.S.Code, to vest jurisdiction in the common pleas court. This assignment of error is without merit.

Initially, we note that Kerouac did not waive the issue of subject-matter jurisdiction by failing to raise it in the trial court in his first Civ.R. 60(B) motion for relief from judgment. Lack of subject-matter jurisdiction may be raised for the first time on appeal. Jenkins v. Keller (1966), 6 Ohio St.2d 122, 35 O.O.2d 147, 216 N.E.2d 379, paragraph five of the syllabus. Because the judgment of a court lacking subject-matter jurisdiction is void ab initio, authority to vacate the order is not derived from Civ.R. 60(B), but from the reviewing court's inherent power. Patton v. Diemer (1988), 35 Ohio St.3d 68, 518 N.E.2d 941, paragraph four of the syllabus.

We agree, however, with International's argument that the language of Section 1447(c), Title 28, U.S.Code, which requires the clerk of the district court to mail a certified copy of the remand order to the clerk of the state court, is not jurisdictional. As the district court held in Van Ryn v. Korean Air Lines (C.D.Cal.1985), 640 F.Supp. 284, once the federal court ordered an action remanded to state court, the federal court was divested of jurisdiction, notwithstanding the failure of the clerk of the district court to send a certified copy of the order to the state court clerk. The court in Van Ryn reasoned that, as a matter of policy, the limited jurisdiction of federal courts suggests that the state court's jurisdiction vests as soon as the federal court orders that removal was not proper. The court further reasoned that logic indicates that jurisdiction be determined by the district court's act of entering its remand order rather than by the clerk's ministerial act of mailing a certified copy of that order. To hold otherwise would promote form over substance.

Kerouac's first assignment of error is overruled.

B. MOTION FOR RELIEF FROM JUDGMENT

In his second assignment of error, Kerouac contends that the trial court abused its discretion by overruling his Civ.R. 60(B) motion for relief from judgment. Recognizing the futility of prevailing on Dragon's allegation that he did not receive notice of the trial date, Kerouac maintains that he did not appear at trial because International failed to give him notice as required by Civ.R. 55(A) when he was acting pro se in the common pleas court. His claim that Dragon represented him in district court but not in common pleas court is specious, and incorrectly assumes, contrary to Sections 1446 and 1447, Title 28, U.S.Code, that when Dragon removed the case to district court, a new case was created. Although a case removed from a state court is treated as if it had been commenced in district court, removal merely vests exclusive jurisdiction of the state court action in the district court. See Wright, Miller, & Cooper, Federal Practice and Procedure (1985, Supp.1994), Sections 3738 and 3739.

When Dragon filed the petition for removal, he expressed a clear intention to defend and thereby entered Kerouac's appearance in the common pleas court for purposes of Civ.R. 55(A). See AMCA Internatl. Corp. v. Carlton (1984), 10 Ohio St.3d 88, 90, 10 OBR 417, 419, 461 N.E.2d 1282, 1285; Muskingum Cty. v. Melvin (1990), 69 Ohio App.3d 811, 814-815, 591 N.E.2d 1302, 1304 (filing an extension for leave to plead is an appearance). As provided by Civ.R. 11, Dragon's signature on Kerouac's petition for removal was his designation that he was the "attorney of record." Dragon's subsequent letter to the clerk of the common pleas court in which he claimed the copy of the answer and counterclaim he sent was merely a "courtesy only" copy does not alter his appearance as counsel of record established by his signature on the petition for removal. Consistent with Civ.R. 11, the assignment commissioner in the court of common pleas assigned Dragon an attorney identification number, and the clerk entered Dragon's name on the appearance docket as attorney of record for Kerouac. Dragon never requested or was granted leave to withdraw as Kerouac's attorney.

The trial court correctly found compliance with Civ.R. 55(A), where Dragon, as Kerouac's representative, was served with written notice of the application for judgment. The trial court then properly granted International's motion for judgment on the merits in Kerouac's absence by means of an ex parte trial except with respect to the award of attorney fees as discussed later in this opinion. See Ohio Valley Radiology Assoc., Inc. v. Ohio Valley Hosp. Assn. (1986), 28 Ohio St.3d 118, 28 OBR 216, 502 N.E.2d 599.

A judgment entered by default may be set aside in the trial court's discretion in accordance with Civ.R. 60(B). Civ.R. 55(B). Civ.R. 60(B) is a remedial rule entitled to liberal construction with a view toward effecting a just result, but "[t]he burden is upon the movant to demonstrate that the interests of justice demand the setting aside of a judgment normally accorded finality." Rose Chevrolet, Inc. v. Adams (1988), 36 Ohio St.3d 17, 21, 520 N.E.2d 564, 567. "Abuse of discretion" is defined as more than an error of law or judgment, but rather an unreasonable, arbitrary, or unconscionable attitude on the part of the court. Huffman v. Hair Surgeon, Inc. (1985), 19 Ohio St.3d 83, 87, 19 OBR 123, 126-127, 482 N.E.2d 1248, 1252.

The negligence of a party's attorney is imputed to the party who seeks relief from judgment on grounds of excusable neglect or inadvertence under Civ.R. 60(B)(1). GTE Automatic Elec., Inc. v. ARC Industries, Inc. (1976), 47 Ohio St.2d 146, 1 O.O.3d 86, 351 N.E.2d 113, paragraph four of the syllabus. A trial court does not abuse its discretion by overruling a Civ.R. 60(B)(1) motion on grounds of excusable neglect where a review of the circumstances demonstrates that a defaulting defendant's conduct, or his attorney's conduct imputable to him, "exhibited a disregard for the judicial system and the rights of the plaintiff." Griffey v. Rajan (1987), 33 Ohio St.3d 75, 514 N.E.2d 1122, syllabus.

As out-of-state counsel, Dragon was not entitled to preferential treatment concerning procedural standards and time limits. See Brown v. Akron Beacon Journal Publishing Co. (1991), 81 Ohio App.3d 135, 143, 610 N.E.2d 507, 512. The significant facts available to the trial court in determining whether the judgment entered against Kerouac resulted from excusable neglect or inadvertence were (1) Kerouac never questioned service of process; (2) Dragon signed the petition for removal; (3) International sent notice of the date for trial or default to Dragon at both mailing addresses listed on his stationery; (4) the clerk mailed notice of the judgment against...