Opinion
No. 106295
06-14-2018
HAWKEN SCHOOL PLAINTIFF-APPELLEE v. NANCY NORSTROM DEFENDANT-APPELLANT
ATTORNEY FOR APPELLANT John Wood 281 Corning Drive Bratenahl, Ohio 44108 ATTORNEYS FOR APPELLEE Robert B. Weltman Jack W. Hinneberg Weltman Weinberg & Reis Co., L.P.A. 323 W. Lakeside Avenue, Suite 200 Cleveland, Ohio 44113
JOURNAL ENTRY AND OPINION JUDGMENT: REVERSED Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-16-869921 BEFORE: E.T. Gallagher, J., Kilbane, P.J., and Celebrezze, J.
ATTORNEY FOR APPELLANT
John Wood
281 Corning Drive
Bratenahl, Ohio 44108
ATTORNEYS FOR APPELLEE
Robert B. Weltman
Jack W. Hinneberg
Weltman Weinberg & Reis Co., L.P.A.
323 W. Lakeside Avenue, Suite 200
Cleveland, Ohio 44113 EILEEN T. GALLAGHER, J.:
{¶1} Defendant-appellant, Nancy Norstrom, appeals the common pleas court's judgment granting summary judgment in favor of plaintiff-appellee, Hawken School. Norstrom raises the following assignments of error for review:
1. The trial court erred in not granting defendant's motion for summary judgment based on res judicata.
2. The trial court erred in entering summary judgment against defendant.
{¶2} After careful review of the record and relevant case law, we reverse the trial court's judgment and remand for proceedings consistent with this opinion.
I. Procedural and Factual History
{¶3} Hawken is a private school located in Cuyahoga County, Ohio. Prior to the 2004-2005 school year, Norstrom enrolled two minor children at Hawken and agreed to pay tuition and fees pursuant to the terms of Enrollment Agreements executed on May 24, 2004.
{¶4} On November 28, 2005, Hawken filed a complaint against Norstrom in Cuyahoga C.P. No. CV-05-578225. The complaint set forth causes of action for breach of contract, alleging that Norstrom failed to pay tuition fees owed to Hawken pursuant to the parties' Enrollment Agreement. Hawken sought payment of the due and owing balance in the amount of $31,967.37, with interest, as of November 23, 2005. On March 15, 2006, default judgment was granted in favor of Hawken and against Norstrom.
{¶5} On May 31, 2016, Norstrom filed a motion to set aside the default judgment pursuant to Civ.R. 3(A) for failure to achieve service within one year of filing. The motion argued that counsel for Hawken never obtained valid service on Norstrom despite being notified on March 27, 2006, that service by ordinary mail had failed for "failure of a deliverable address."
{¶6} On August 1, 2016, the trial court granted Norstrom's motion to set aside the judgment for lack of proper service, stating, in pertinent part:
Since this court's [default] judgment on March 15, 2006 was rendered without personal jurisdiction, the judgment is a nullity. As such, Hawken failed to commence its complaint within one year from filing as required by Civ.R. 3(A). Defendant's motion to dismiss is well taken.
{¶7} In addition, the trial court found that it was required to dismiss the case with prejudice because Hawken failed to commence the breach of contract action within the eight-year statute of limitations period set forth under R.C. 2305.06.
{¶8} Hawken did not appeal from the trial court's August 1, 2016 judgment. Instead, Hawken filed a motion for reconsideration on August 4, 2016, arguing that the trial court erred in dismissing the case with prejudice because the applicable statute of limitations period in this case is 15 years, and not eight years as the trial court suggested. Hawken noted that the statute of limitations under R.C. 2305.06 for an action on a written contract was changed from 15 years to 8 years on September 28, 2012. Because Hawken's breach of contract claim accrued before the statutory amendment took effect, Hawken requested the trial court reconsider its judgment and dismiss the case without prejudice so that Hawken could refile the case within the applicable 15-year statute of limitations period.
{¶9} On August 17, 2016, the trial court granted Hawken's motion for reconsideration and dismissed the case without prejudice. Norstrom did not appeal the trial court's order granting reconsideration.
{¶10} On October 4, 2016, Hawken refiled its breach of contract action against Norstrom in C.P. No. CV-16-869921. The complaint reiterated the allegations previously raised by Hawken in 2005, and sought unpaid tuition and fees in the amount of $72,355.14, with interest, as of October 3, 2016.
{¶11} Once this case was initiated, Norstrom filed a pre-answer motion for summary judgment pursuant to Civ.R. 56(B). Norstrom argued that the current action was barred by the doctrine of res judicata because "the original dismissal with prejudice on August 1, 2016, is still effective because there is no provision in the Civil Rules for a motion for reconsideration of a final appealable judgment."
{¶12} On April 17, 2017, the trial court denied Norstrom's motion to dismiss, stating:
This court's 8/17/2016 entry in CV-05-578225 was made pursuant to Civ.R. 60(A) in order to correct an improper numerical calculation. As such, defendant's motion * * * filed 1/31/2017 is denied. If it were to hold otherwise, this court would be giving undue enrichment and windfall based on its own mechanical error.
{¶13} On July 18, 2017, Hawken filed a motion for summary judgment. Hawken argued that it is entitled to judgment as a matter of law in the amount of $72,355.14 with interest, because Norstrom "failed and refused to make all payments due and owing to Hawken as required [under the Enrollment Agreements], resulting in a breach of the Agreements." Norstrom did not oppose the motion for summary judgment.
{¶14} On September 19, 2017, the trial court granted Hawken's motion for summary judgment, stating, in relevant part:
This cause came on for consideration upon the unopposed motion of Hawken for summary judgment. The court, having considered the evidence presented and having construed the evidence most strongly in favor of the non-moving party, determines that reasonable minds can come to but one conclusion, that there are
no genuine issues of material fact, and that Hawken is entitled to judgment as a matter of law.Norstrom now appeals from the trial court's judgment.
Therefore, it is ordered, adjudged and decreed that plaintiff's motion for summary judgment be granted, and that Hawken be awarded judgment against the defendant in the amount of $72,355.14 together with interest at the rate of 19.56 percent per annum from October 10, 2016, and costs.
II. Law and Analysis
{¶15} In her first assignment of error, Norstrom argues the trial court erred by denying her motion for summary judgment. In her second assignment of error, Norstrom argues the trial court erred by granting Hawken's motion for summary judgment. For the purposes of judicial clarity, we address these assignments of error together.
{¶16} Norstrom filed her motion for summary judgment pursuant to Civ.R. 56(B), which provides, in part:
A party against whom a claim * * * is asserted * * * may, at any time, move with or without supporting affidavits for a summary judgment in the party's favor as to all or any part of the claim[.]
{¶17} This court reviews a trial court's grant of summary judgment under the de novo standard. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Before summary judgment can be granted the trial court must determine that (1) there is no genuine issue of material fact; (2) the moving party is entitled to judgment as a matter of law; and (3) reasonable minds can come to but one conclusion and that conclusion is adverse to the nonmoving party, said party being entitled to have the evidence construed most strongly in his favor. Horton v. Harwich Chem. Corp., 73 Ohio St.3d 679, 653 N.E.2d 1196 (1995), paragraph three of the syllabus; Zivich v. Mentor Soccer Club, 82 Ohio St.3d 367, 369-370, 696 N.E.2d 201 (1998).
{¶18} Summary judgment consists of a burden-shifting framework. The movant bears the initial burden of informing the trial court of the basis for the motion, and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact on the essential element(s) of the nonmoving party's claims. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). Once the moving party satisfies its burden, the nonmoving party "may not rest upon the mere allegations or denials of the party's pleadings, but the party's response, by affidavit or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Id.; Mootispaw v. Eckstein, 76 Ohio St.3d 383, 385, 667 N.E.2d 1197 (1996); Civ.R. 56(E). Doubts must be resolved in favor of the nonmoving party. Murphy v. Reynoldsburg, 65 Ohio St.3d 356, 358-359, 604 N.E.2d 138 (1992).
{¶19} In her motion for summary judgment, Norstrom argued that, absent a valid Civ.R. 60(B) motion or direct appeal, the trial court's August 17, 2016 judgment granting Hawken's motion for reconsideration was a legal nullity. Norstrom maintained that the trial court's prior order dismissing Case No. CV-05-578225 with prejudice remains in full effect and, therefore, the Hawken's current complaint is barred by the doctrine of res judicata. In support of her motion, Norstrom submitted the properly framed affidavit of her counsel, John Wood, and relevant filings from Case Nos. CV-05-578225 and CV-16-869921.
{¶20} Hawken opposed Norstrom's motion, claiming that Norstrom was improperly attempting to collaterally attack a judgment rendered in a separate proceeding. On appeal, Hawken reiterates its position, arguing that Norstrom has not demonstrated that the judgment dismissing the complaint without prejudice was issued without proper court jurisdiction or was the product of fraud. Hawken further contends that the trial court properly exercised its authority to correct the clerical mistake rendered in its judgment dismissing the case with prejudice pursuant to Civ.R. 60(A).
A. Collateral Attack
{¶21} A collateral attack is "'an attempt to defeat the operation of a judgment, in a proceeding where some new right derived from or through the judgment is involved.'" Fawn Lake Apts. v. Cuyahoga Cty. Bd. of Revision, 85 Ohio St.3d 609, 611, 710 N.E.2d 681 (1999), quoting Kingsborough v. Tousley, 56 Ohio St. 450, 458, 47 N.E. 541 (1897). More specifically, a "collateral attack" means
[a]n attack on a judgment in a proceeding other than direct appeal; esp. an attempt to undermine a judgment through a judicial proceeding in which the ground of the proceeding (or a defense in the proceeding) is that the judgment is ineffective * * * .Ohio Pyro, Inc. v. Ohio Dept. of Commerce, 115 Ohio St.3d 375, 2007-Ohio-5024, 875 N.E.2d 550, ¶ 17, quoting Black's Law Dictionary 278 (8th Ed.2004). See also Hall v. Tucker, 161 Ohio App.3d 245, 2005-Ohio-2674, 829 N.E.2d 1259 ¶ 42, (4th Dist.), quoting 63 Ohio Jurisprudence 3d, Judgments, Section 471, 285 (2003) ("A 'collateral attack' on a judgment may be defined as an attempt to avoid, defeat, or evade judgment, or to deny its force and effect, in some judicial proceeding not provided by law for the express purpose of reviewing it.").
{¶22} "In general, a collateral attack on a judgment is actually an attack on the integrity of the judgment. The merits of the previous judgment are not at issue in such a situation — only the fundamental validity of the previous judgment is at issue." Id. at ¶ 25. "Collateral attacks on judgments conceivably can be mounted in either the court that issued the judgment or in a different court, as they involve any new 'proceeding' not encompassed within the proceeding in which the original judgment was entered." Id. at ¶ 20. However,
subject to only rare exceptions, direct attacks, i.e., appeals, by parties to the litigation, are the primary way that a civil judgment is challenged. For these reasons, it necessarily follows that collateral or indirect attacks are disfavored and that they will succeed only in certain very limited situations.Id. at ¶ 22.
{¶23} The Ohio Supreme Court has recognized two "very limited exceptions" that permit a collateral attack: "when the issuing court lacked jurisdiction or when the order was the product of fraud (or of conduct in the nature of fraud)." Id. at ¶ 23. "[I]n the absence of those [two] fundamental deficiencies, a judgment is considered 'valid' (even if it might perhaps have been flawed in its resolution of the merits of the case) and is generally not subject to collateral attack." Id. at ¶ 25.
{¶24} Thus, Norstrom's attempt to collaterally attack the trial court's reconsideration judgment dismissing Case No. CV-05-578225 without prejudice will succeed only if the evidentiary materials attached to her motion for summary judgment demonstrate that the judgment was issued without jurisdiction or was the product of fraud.
B. Jurisdiction to Consider a Motion for Reconsideration
{¶25} In order to properly address the parties' opposing arguments, we are required to examine the nature of Hawken's motion for reconsideration in Case No. CV-05-578225.
{¶26} It is well established that a dismissal with prejudice is a final decision on the merits. Persaud v. St. John Med. Ctr, 8th Dist. Cuyahoga No. 105402, 2017-Ohio-7178, ¶ 22, citing Tower City Properties v. Cuyahoga Cty. Bd. of Revision, 49 Ohio St.3d 67, 69, 551 N.E.2d 122 (1990). Since the adoption of the Civil Rules, Civ.R. 60 provides the exclusive means for a trial court to vacate a final judgment. U.S. Bank, N.A. v. Majchrowicz, 8th Dist. Cuyahoga No. 100174, 2014-Ohio-2530, ¶ 19, citing In re R.T.A., 8th Dist. Cuyahoga No. 98498, 2012-Ohio-5080, ¶ 5; Rice v. Bethel Assoc., Inc., 35 Ohio App.3d 133, 520 N.E.2d 26 (9th Dist.1987); In re D.R.M., 8th Dist. Cuyahoga No. 98633, 2012-Ohio-5422. Thus, "a motion for reconsideration" filed after a final judgment is not contemplated by the Ohio Rules of Civil Procedure. Pitts v. Ohio Dept. of Transp., 67 Ohio St.2d 378, 423 N.E.2d 1105 (1981). Accordingly, motions for reconsideration of a final judgment in the trial court are a nullity, and trial courts do not have jurisdiction to address them. Id. at 380. In fact, because judgments ruling on motions for reconsideration are a nullity, they cannot be appealed. In re Estate of Andolsek, 11th Dist. Lake No. 2017-L-011, 2017-Ohio-893, ¶ 2, citing Pitts at 380.
{¶27} It has long been recognized, however, that a trial court does have some discretion to treat a motion for reconsideration as a motion for relief from judgment under Civ.R. 60(B). Majchrowicz, 8th Dist. Cuyahoga No. 100174, 2014-Ohio-2530, at ¶ 20. In this case, however, the trial court's judgment granting Hawken's motion for reconsideration does not contain any language to suggest the court treated the motion as a motion for relief from judgment. The judgment entry simply states that "Plaintiff's motion for reconsideration, filed August 4, 2016, is granted."
{¶28} We recognize that the trial court in the present action treated Hawken's motion for reconsideration as a Civ.R. 60(A) motion to correct an improper numerical calculation. However, we find the record does not support the trial court's interpretation of Hawken's motion.
{¶29} Civ.R. 60(A) provides, in relevant part, as follows:
(A) Clerical mistakes. Clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected
by the court at any time on its own initiative or on the motion of any party and after such notice, if any, as the court orders.
{¶30} "'Civ.R. 60(A) permits a trial court, in its discretion, to correct clerical mistakes which are apparent on the record, but does not authorize a trial court to make substantive changes in judgments.'" Branden v. Branden, 8th Dist. Cuyahoga No. 104523, 2017-Ohio-7477, ¶ 10, quoting State ex rel. Litty v. Leskovyansky, 77 Ohio St.3d 97, 100, 671 N.E.2d 236 (1996). The term "clerical mistake" refers to a mistake or omission that is apparent on the record but does not involve a substantive legal decision or judgment. Litty at 100.
"The basic distinction between clerical mistakes that can be corrected under Civ.R. 60(A) and substantive mistakes that cannot be corrected is that the former consists of 'blunders in execution' whereas the latter consists of instances where the court changes its mind, either because it made a legal or factual mistake in making its original determination, or because, on second thought, it has decided to exercise its discretion in a different manner."Karnes v. Karnes, 8th Dist. Cuyahoga No. 94521, 2010-Ohio-4016, ¶ 36, quoting Kuehn v. Kuehn, 55 Ohio App.3d 245, 247, 564 N.E.2d 97 (12th Dist.1988).
{¶31} After careful review of Hawken's motion for reconsideration, which is attached to Norstrom's Civ.R. 56(B) motion, it is evident that Hawken did not present arguments concerning a clerical error. Rather, Hawken's motion for reconsideration challenged the legal merits of the trial court's decision to dismiss the case with prejudice based on the court's determination that Hawken failed to obtain valid service within the statute-of-limitations period. Similarly, the trial court's decision to dismiss the case with prejudice was not the product of "an improper numerical calculation," as Hawken contends. Rather, it is evident that the trial court's judgment committed a substantive legal mistake by failing to consider the accrual date of Norstrom's alleged breach of contract in conjunction with the September 28, 2012 effective date of the amendment to the statute-of-limitations period under R.C. 2305.06. The trial court's judgment was predicated on an incorrect interpretation of a statute and constituted a legal error. Thus, Hawken's motion for reconsideration did not raise arguments contemplated under Civ.R. 60(A), and the trial court erred in this case to the extent it found the prior judgment in Case No. CV-05-578225 to be the product of an improper numerical calculation. The trial court's interpretation of the motion is not supported by the record and appears to be made in an effort to avoid a perceived windfall to Norstrom.
{¶32} Furthermore, we find no basis to conclude that the trial court could have reasonably treated Hawken's motion for reconsideration as a motion to vacate under Civ.R. 60(B). Civ.R. 60(B) allows a court to grant relief from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise or excusable neglect;
(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial * * *;
(3) fraud * * *, misrepresentation or other misconduct of an adverse party;
(4) the judgment has been satisfied, released or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or
(5) any other reason justifying relief from judgment.
{¶33} To prevail on a motion for relief from judgment, the movant must demonstrate that "(1) the party has a meritorious defense or claim to present if the relief is granted; (2) the party is entitled to relief under one of the grounds stated in Civ.R. 60(B)(1)-(5); and (3) the motion is made within a reasonable time * * *." GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St.2d 146, 150, 351 N.E.2d 113 (1976).
{¶34} In this case, Hawken's motion for reconsideration alleged that the trial court's judgment dismissing Case No. CV-05-578225 with prejudice relied on the court's improper interpretation of R.C. 2305.06. However, "a motion for relief from judgment cannot be predicated upon the argument that the trial court made a mistake in rendering its decision." Chester Twp. v. Fraternal Order of Police, 102 Ohio App.3d 404, 408, 657 N.E.2d 348 (11th Dist.1995). The type of mistake contemplated by Civ.R. 60(B)(1) is a mistake by a party or his legal representative, not a mistake by the trial court in its legal analysis. Antonopoulos v. Eisner, 30 Ohio App.2d 187, 284 N.E.2d 194 (8th Dist.1972).
{¶35} Similarly, this court has indicated that "Civ.R. 60(B)(5) does not contemplate possible error in the legal reasoning underlying a judgment as any other reason justifying relief from judgment." Rea v. Pecsok, Rea & Demarchi, 8th Dist. Cuyahoga No. 71014, 1997 Ohio App. LEXIS 1437, 9 (Apr. 10, 1997); Anderson v. Garrick, 8th Dist. Cuyahoga No. 68244, 1995 Ohio App. LEXIS 4501, 13 (Oct. 12, 1995) ("Civ.R. 60(B) is not a viable means to attack legal errors made by a trial court; rather, it permits a court to grant relief when the factual circumstances relating to a judgment are shown to be materially different from the circumstances at the time of the judgment."). Thus, if Hawken wished to challenge the legality of the trial court's final judgment dismissing the case with prejudice, it was required to file a direct appeal, which it did not. As this court has routinely held, "[i]t is axiomatic that 'a Civ.R. 60(B) motion for relief from judgment may not be used as a substitute for a timely appeal.'" Crown Auto Sales, Inc. v. Copart of Connecticut, Inc., 8th Dist. Cuyahoga No. 104366, 2016-Ohio-7896, ¶ 8, quoting Doe v. Trumbull Cty. Children Servs. Bd., 28 Ohio St.3d 128, 502 N.E.2d 605 (1986), paragraph two of the syllabus.
{¶36} Having determined that Hawken's motion for reconsideration cannot be reasonably construed as a Civ.R. 60 motion for relief from judgment, we find the court was without jurisdiction to reconsider its prior judgment dismissing the case with prejudice. See Udelson v. Udelson, 8th Dist. Cuyahoga No. 92717, 2009-Ohio-6462, ¶ 20-21 (holding the "motion to reconsider" did not contain any indication that it was moving the court to vacate the judgment based upon Civ.R. 60(B), nor did it raise any of the Civ.R. 60(B) requirements necessary to vacate a judgment); Bethlenfalvy v. Sun Newspapers, 8th Dist. Cuyahoga No. 76226, 2000 Ohio App. LEXIS 2104, 5 (May 18, 2000) (holding the trial court lacked subject matter jurisdiction to grant the motion for reconsideration after the entry of the final order granting summary judgment). Because the trial court's order dismissing the case with prejudice was a final judgment, the court's order granting Hawken's motion for reconsideration is null and void. See also Zacharias v. Medicore Transp. Inc., 8th Dist. Cuyahoga No. 105413, 2017-Ohio-8171, ¶ 9 ("It is well settled that a judgment rendered by a court that lacks jurisdiction is void ab initio."); Forman v. Sherman, 8th Dist. Cuyahoga No. 85165, 2005-Ohio-3022, ¶ 14 (holding a motion from reconsideration of a final judgment is void). As such, the trial court's judgment granting Hawken's motion for reconsideration was subject to collateral attack at any time. Lingo v. State, 138 Ohio St.3d 427, 2014-Ohio-1052, 7 N.E.3d 1188, ¶ 46.
The effect of determining that a judgment is void is well established. It is as though such proceedings had never occurred; the judgment is a mere nullity and the parties are in the same position as if there had been no judgment.Romito v. Maxwell, 10 Ohio St.2d 266, 267, 227 N.E.2d 223 (1967).
{¶37} Under the doctrine of res judicata, "[a] valid, final judgment rendered upon the merits bars all subsequent actions based upon any claim arising out of the transaction or occurrence that was the subject matter of the previous action." Grava v. Parkman, 73 Ohio St.3d 379, 653 N.E.2d 226 (1995), syllabus.
{¶38} At the point the dismissal with prejudice became a final order, Hawken could seek only relief from the legal merits of that order by appealing to this court within 30 days. Because Hawken failed to comply with the Appellate Rules governing final orders, the trial court's dismissal of the original complaint with prejudice has not been overturned by a court with proper jurisdiction. In this case, Hawken's original complaint and its current complaint are identical — arising out of the same transaction or occurrence. Under these circumstances, and without giving effect to the void reconsideration judgment, we find the dismissal with prejudice operated as an adjudication on the merits that barred Hawken's present complaint by operation of the doctrine of res judicata. In addition, because the trial court's dismissal without prejudice was a legal nullity, this court would have been without jurisdiction to address Norstrom's challenge to the court's judgment on direct appeal.
{¶39} Accordingly, we find the trial court erred in granting summary judgment in favor of Hawken and denying Norstrom's Civ.R. 56(B) motion for summary judgment. We recognize the distasteful implications of our judgment. However, the Ohio Civil Rules of Civil Procedure and the Ohio Rules of Appellate Procedure provided Hawken with sufficient avenues of relief that may have avoided the procedural shortfalls currently debated on appeal. Hawken failed to comply with these rules and cannot now avoid the doctrine of res judicata merely because it results in an unfavorable judgment.
{¶40} Norstrom's first and second assignments of error are sustained.
{¶41} The trial court's judgment is reversed.
It is ordered that appellant recover of said appellee costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the Cuyahoga County Court of Common Pleas to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. EILEEN T. GALLAGHER, JUDGE MARY EILEEN KILBANE, P.J., and
FRANK D. CELEBREZZE, JR., J., CONCUR