Newark Orthopedics, Inc. v. Brock

• Decision Date: 25 January 1994
• Docket Number: No. 93AP-807,93AP-807
• Citation: 92 Ohio App.3d 117,634 N.E.2d 278
• Parties: NEWARK ORTHOPEDICS, INC. et al., Appellees, v. BROCK, Appellant, et al.
• Court: Ohio Court of Appeals

Page 117

92 Ohio App.3d 117

634 N.E.2d 278

NEWARK ORTHOPEDICS, INC. et al., Appellees, v. BROCK, Appellant, et al.

No. 93AP-807.

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

Decided Jan. 25, 1994.

Carlile, Patchen & Murphy, Alan F. Berliner and Jan E. Hensel, Columbus, for appellees.

Ball, Noga & Tanoury and Ronald B. Noga, Columbus, for appellant.

WHITESIDE, Judge.

Defendant-appellant, Thomas E. Brock, Jr., appeals from a judgment of the Franklin County Court of Common Pleas denying his motion for relief from judgment, and raises the following four assignments of error:

1. "A trial court abuses its discretion when it refuses to vacate a default judgment entered during a period in which the movant was an adjudicated incompetent and no guardian was appointed to represent or protect his interests."

2. "The trial court abused its discretion in not granting defendant-appellant relief from the judgment of May 20, 1983, as that judgment was not a final judgment, but at most an interlocutory order."

3. "The trial court abused its discretion in denying appellant relief from the judgement [sic] of May 20, 1983, as that judgment was entered on behalf of individual plaintiffs after the case had been certified as a class action."

4. "The trial court abused its discretion in failing to grant appellant's motion for relief from judgment as appellant met all the requirements for such relief, or at a minimum was entitled to a hearing."

Plaintiffs-appellees, Newark Orthopedics, Inc. and Henry D. Rocco, M.D., filed a complaint on July 26, 1982, against appellant and others alleging a misappropriation of funds. On August 2, 1982, appellant was declared incompetent in In re Guardianship of Brock, case No. 345845, Franklin County Court of Common Pleas, Probate Division. ¹ Lola V. Brock was appointed as guardian. On August 19, 1982, an amended complaint was filed, adding new-party plaintiffs and new-party defendants. On September 28, 1982, appellant filed an answer and counterclaim, pro se, purportedly on behalf of himself and three corporate defendants.

On December 17, 1982, appellant's guardian was discharged of her fiduciary duties by the probate court for failure to execute a bond of indemnity and, additionally, for being beyond the jurisdiction of the court. No new guardian was appointed by the probate court.

On May 23, 1983, the appellees' motion to maintain this action as a class action was granted. On May 20, 1983, the court granted appellees' motion for the sanction of judgment by default against appellant for failure to comply with discovery orders. ² However, the sanction was not in favor of all the members of the class.

Appellant was also involved in an interpleader action in the Franklin County Court of Common Pleas, Lincoln Natl. Life Ins. Co. v. Brock, case No. 83CV-05-2799. Lincoln National Life Insurance Company filed a motion for appointment of a guardian ad litem for appellant, and the motion was granted on April 6 1984. ³ Counsel for appellees in this case were served with a copy of the motion on February 1, 1984. On April 5, 1984, the trial court granted a default judgment in this case. A damages hearing was held on April 19, 1984, and the trial court entered a judgment against appellant in favor of the appellee class in the amount of $714,670.69.

The guardianship of appellant was terminated by order of the Franklin County Court of Common Pleas, Probate Division, on February 28, 1985.

Several appellees have attempted to execute against the proceeds of a disability insurance policy insuring appellant. The execution was filed as part of an interpleader action in the Federal District Court for the Southern District of Ohio. In the interpleader action, appellant challenged the validity of the May 20, 1983 judgment. The district court held that appellant could not collaterally attack the May 20, 1983 entry and should attempt to vacate the order by a Civ.R. 60(B) motion. Appellant then filed his motion for relief from judgment pursuant to Civ.R. 60(B) on March 4, 1993. The trial court overruled the motion.

Appellant's first and fourth assignments of error are related and will be discussed together. Appellant contends that the trial court abused its discretion when it refused to vacate the default judgment, or at least grant appellant a hearing on his Civ.R. 60(B) motion for relief from judgment. The trial court denied the motion without hearing for the stated reason that "[t]he motion is not well-taken and no request for oral hearing having been made." ⁴

Appellees have not contested that appellant was adjudicated incompetent and without the benefit of a guardian at the time of the judgments. Such judgments are voidable, if not void. See Sturges v. Longworth (1853), 1 Ohio St. 544, 1853 WL 55. If voidable, it is necessary to determine whether the trial court did abuse its discretion when it refused to vacate the default judgment.

Civ.R. 60(B) provides:

"On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable neglect; * * * (5) any other reason justifying relief from the judgment. The motion shall be made within a reasonable time, and for reasons (1), (2) and (3) not more than one year after the judgment, order or proceeding was entered or taken. * * * "

In Griffey v. Rajan (1987), 33 Ohio St.3d 75, 77, 514 N.E.2d 1122, 1123, the Ohio Supreme Court stated that the decision whether to grant relief from judgment is addressed "to the sound discretion of the trial court, and that court's ruling will not be disturbed on appeal absent a showing of abuse of discretion." The Ohio Supreme Court, in the second paragraph of the syllabus of GTE Automatic Elec. v. ARC Industries (1976), 47 Ohio St.2d 146, 1 O.O.3d 86, 351 N.E.2d 113, held that "[t]o 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 * * *."

The moving party must establish the three requirements separately. Id. at 151, 1 O.O.3d at 88, 351 N.E.2d at 116.

In this case, appellant has set forth facts which, if true, establish the three requirements. The first is that the party have a meritorious defense to present if relief is granted. Here, appellant, although incompetent, did personally file an answer to the complaint on September 28, 1982. Although it was filed while appellant was adjudicated to be incompetent, it did raise specific defenses. ⁵ The answer initially set forth a general denial; however, it also stated:

"SECOND DEFENSE

"5. Plaintiffs have failed to state a claim upon which relief can be granted.

"THIRD DEFENSE

"6. Plaintiffs have failed to join all parties in interest.

"FOURTH DEFENSE

"7. Plaintiffs have failed to join all necessary parties."

The answer also set forth a cross-claim alleging other parties to be responsible.

Appellees argue that original pleadings are not sufficient to sustain a motion for relief from judgment. Appellees cite the Eighth District Court of Appeals in Hornyak v. Brooks (1984), 16 Ohio App.3d 105, 106-107, 16 OBR 111, 112-113, 474 N.E.2d 676, 678, as stating that:

"Unless the movant's affidavit or other evidentiary materials demonstrate grounds for the motion, the trial court does not abuse its discretion by denying the motion without a hearing. * * *

" * * *

" * * * [O]riginal pleading[s] will not suffice for that purpose [evidentiary material to demonstrate the validity of the underlying claim]."

This court has also stated that mere general denials in an answer do not allege a meritorious defense for Civ.R. 60(B) motions. See Dematteo v. Smith (Dec. 5, 1985), Franklin App. No. 85AP-13, unreported, 1985 WL 4150. However, this court has also held that the requirement of a meritorious defense is met by the filing of an answer that contains an affirmative defense or facts sufficient to support the claim of a valid defense. See Internatl. Masonry, Inc. v. Weilbacher (Jan. 26, 1982), Franklin App. No. 81AP-714, unreported, 1982 WL 3952; Gueli v. Carter Productions, Inc. (July 29, 1982), Franklin App. No. 82AP-249, unreported, 1982 WL 4310.

In this case, appellant did more than make a general denial by his answer. He also raised affirmative defenses. The defenses raised indicate that appellant denied being responsible for all or part of the misappropriation and contended another party (or parties) was responsible. The trial court is required to determine whether appellant has alleged a defense which, if proved, would constitute a partial or a complete defense to the claim alleged by the complaint. A Civ.R. 60(B) motion need not establish that the movant ultimately prevail on the asserted defense. Internatl. Masonry, supra, citing Brenner v. Shore (1973), 34 Ohio App.2d 209, 215, 63 O.O.2d 373, 376, 297 N.E.2d 550, 554. Therefore, appellant has raised a meritorious defense to the underlying claim of appellees. That requirement for a Civ.R. 60(B) motion has been met to the extent it is applicable. However, here, appellant had no meaningful opportunity to present a defense or otherwise to defend since he had been adjudicated as being incompetent, and no guardian ad litem had been appointed as required by Civ.R. 17(B).

Another requirement of GTE, supra, is that appellant must be entitled to relief under one of the grounds stated in Civ.R. 60(B)(1) through (5). Appellees contend that appellant should have proceeded under Civ.R. 60(B)(1), excusable neglect. A motion pursuant to Civ.R. 60(B)(1) must be made within one year after the judgment was entered. Since appellant was incompetent and without a guardian or guardian ad litem during that time period, he...