Kay v. Marc Glassman, Inc.

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1 KAY ET AL., APPELLEES, V. MARC GLASSMAN, INC., APPELLANT. 2 [Cite as Kay v. Marc Glassman, Inc. (1996), ___ Ohio St.3d ___.] 3 Civil procedure -- Trial court abuses its discretion when overruling a 4 motion for relief from judgment without first holding an evidentiary 5 hearing. 6 (No. 95-464 -- Submitted March 19, 1996 -- Decided July 3, 1996.) 7 APPEAL from the Court of Appeals for Summit County, No. 16726. 8 On November 9, 1993, plaintiff-appellee Theodora Kay filed a complaint 9 against defendant-appellant, Marc Glassman, Inc., for injuries she sustained as 10 a result of a slip and fall in a store operated by appellant. Kay s husband and 11 children filed accompanying claims for loss of consortium. A copy of the 12 complaint was served on appellant s statutory agent and attorney, Jack 13 Schulman, on November 15, 1993. 14 inadvertently failed to file it within the prescribed twenty-eight days. On 15 January 11, 1994, appellees moved for a default judgment. A hearing was held 16 on January 31, 1994, at which time the court heard evidence on appellees 17 damages. The trial court granted appellees motion on February 7, 1994 and Schulman prepared an answer, but 1 awarded $181,000 in damages ($151,000 to Kay personally; $30,000 to her 2 husband; and $1,000 to be divided among the children). 3 On February 15, 1994, while reviewing files with a law clerk, appellant s 4 counsel discovered that the answer he had prepared had never been filed with 5 the court and that a default judgment had been awarded to appellees. That next 6 day, on February 16, 1994, appellant filed a Civ.R. 60(B) motion for relief from 7 judgment. In his motion, appellant s counsel explained that on December 10, 8 1993, he had prepared an answer, along with a request for production of 9 documents and interrogatories. After signing the pleadings and cover letters, 10 counsel returned the documents to his secretary along with the case file for 11 mailing to the court and to opposing counsel. Schulman s secretary, who, in 12 addition to her secretarial duties, was in the process of helping sort out the law 13 firm s bookkeeping system following the retirement of the firm s bookkeeper, 14 mistakenly returned the case file containing the answer and additional 15 pleadings to the file drawer instead of mailing them. 16 In support of the motion, Schulman attached his own affidavit as well as 17 the affidavits of his secretary and law clerk. Each of these affidavits outlined 2 1 in detail the above facts. Schulman also attached to the motion the original 2 answer and pleadings he had prepared. 3 The trial court, without holding a hearing, denied appellant s motion for 4 relief from judgment. The court of appeals affirmed, finding that the attorney s 5 neglect was not excusable and that the trial court did not abuse its discretion in 6 denying the Civ.R. 60(B) motion without conducting an evidentiary hearing. 7 8 The cause is now before this court upon the allowance of a discretionary appeal. 9 10 11 12 13 14 __________ Weick, Gibson & Lowry, Paul A. Weick, Leslie S. Graske and David C. Weick, for appellees. Schulman, Schulman & Meros Co., L.P.A., and Jack M. Schulman, for appellant. __________ 15 FRANCIS E. SWEENEY, SR., J. In this case, we must decide whether the 16 trial court abused its discretion in denying appellant s motion for relief from 3 1 judgment. For the following reasons, we believe the motion should have been 2 granted and consequently reverse the judgment of the court of appeals. 3 Appellant initially contends that the trial court erred in denying its 4 motion for relief from judgment without first conducting an evidentiary 5 hearing. This issue was discussed in Coulson v. Coulson (1983), 5 Ohio St.3d 6 12, 16, 5 OBR 73, 76-77, 448 N.E.2d 809, 812. In Coulson, this court adopted 7 the following rule set forth in Adomeit v. Baltimore (1974), 39 Ohio App.2d 97, 8 105, 68 O.O.2d 251, 255, 316 N.E.2d 469, 476: If the movant files a motion 9 for relief from judgment and it contains allegations of operative facts which 10 would warrant relief under Civil Rule 60(B), the trial court should grant a 11 hearing to take evidence and verify these facts before it rules on the motion. 12 In Coulson, we found that there was no abuse of discretion in granting a 13 hearing, where the motion for relief from judgment and supporting affidavit 14 contained allegations of operative facts warranting relief. 15 The converse is equally true. Thus, the trial court abuses its discretion in 16 denying a hearing where grounds for relief from judgment are sufficiently 17 alleged and are supported with evidence which would warrant relief from 4 1 judgment. Adomeit v. Baltimore, supra, at 103, 105, 68 O.O.2d at 254-255, 2 316 N.E.2d at 475-476. This holding is in accord with the underlying policies 3 governing Civ.R. 60(B) and, in particular, the fact that Civ.R. 60(B) is a 4 remedial rule to be liberally construed so that the ends of justice may be served. 5 Colley v. Bazell (1980), 64 Ohio St.2d 243, 249, 18 O.O.3d 442, 446, 416 6 N.E.2d 605, 610. 7 With these principles in mind, we hold the trial court abused its 8 discretion by overruling the motion for relief from judgment without first 9 holding an evidentiary hearing. Moreover, under the facts of this case, since 10 grounds for relief from judgment appear on the face of the record, the court 11 should have granted the Civ.R. 60(B) motion as a matter of law. 12 Appellant s motion, which was brought under Civ.R. 60(B)(1) and (5), 13 essentially alleged excusable neglect under Civ.R. 60(B)(1).1 14 excusable neglect is an elusive concept which has been difficult to define and 15 to apply. Nevertheless, we have previously defined excusable neglect in the 16 negative and have stated that the inaction of a defendant is not excusable 17 neglect if it can be labeled as a complete disregard for the judicial system. 5 The term 1 GTE Automatic Elec. v. ARC Industries, Inc. (1976), 47 Ohio St.2d 146, 153, 1 2 O.O.3d 86, 90, 351 N.E.2d 113, 117; Rose Chevrolet, Inc. v. Adams (1988), 36 3 Ohio St.3d 17, 21, 520 N.E.2d 564, 567, at fn. 4. Although a movant is not 4 required to support its motion with evidentiary materials, the movant must do 5 more than make bare allegations that he or she is entitled to relief. Rose 6 Chevrolet, Inc., supra, at 20, 520 N.E.2d at 566. Thus, in order to convince the 7 court that it is in the best interests of justice to set aside the judgment or to 8 grant a hearing, the movant may decide to submit evidentiary materials in 9 support of its motion. 10 This is exactly what appellant did in this case. Rather than blankly assert 11 that it was entitled to relief, appellant put forth evidence to substantiate its 12 motion. Appellant s counsel attached three separate affidavits (as well as the 13 prepared answer and pleadings) to attest to the fact that he had timely prepared 14 an answer but that his secretary had inadvertently placed the pleadings back 15 into the file drawer rather than mail them to the court for filing and to opposing 16 counsel. Counsel explained that the failure to file the answer stemmed from 17 the reorganization of the firm s accounting system and was simply an isolated 6 1 incident and not an ongoing concern. Appellant s counsel did precisely what 2 the rules require of him--through the submission of affidavits and 3 accompanying exhibits, appellant alleged sufficient operative facts tending to 4 show excusable neglect. Since appellant supported its motion with operative 5 facts warranting relief, the trial court should have granted appellant s motion 6 for relief from judgment and abused its discretion in failing to do so. 7 Accordingly, we reverse the judgment of the court of appeals. 8 Judgment reversed. DOUGLAS, RESNICK, PFEIFER and STRATTON, JJ., concur. 9 MOYER, C.J., and COOK, J., dissent. 10 11 12 Footnote: 13 1 14 the three-part test announced in GTE Automatic Elec. v. ARC Industries, Inc. 15 (1976), 47 Ohio St.2d 146, 1 O.O.3d 86, 351 N.E.2d 113. Under the first 16 prong, appellant alleged a meritorious defense by arguing that it owed Kay no 17 duty of care and that her injuries were not compensable since, her fall was There is no question that appellant has satisfied the first and third prongs of 7 1 caused by the accumulation of melting snow tracked into the store by 2 customers. See Paschal v. Rite Aid Pharmacy (1985), 18 Ohio St.3d 203, 18 3 OBR 267, 480 N.E.2d 474. Appellant has also satisfied the third prong of GTE 4 by filing its Civ.R. 60(B) motion only one day after discovering that a default 5 judgment had been granted to appellees. 6 Cook, J., dissenting. I respectfully dissent from the legal determination 7 of the majority that the trial court abused its discretion in denying Civ.R. 60(B) 8 relief. In order to find that the trial court abused its discretion, Mr. Schulman s 9 neglect must be of such character that the only reasonable view is that it is 10 excusable. 11 The neglect here is Mr. Schulman s failure to timely answer the 12 plaintiff s complaint. Mr. Schulman attributes this failure to his secretary s 13 neglect. The secretary s neglect is tied to office circumstances regarding the 14 retirement of the bookkeeper. Those circumstances may help explain why the 15 secretary did not file the answer, but not why Schulman s neglect in failing to 16 correct those circumstances is legally excusable. 8 1 Given that an attorney is accountable for errors by his or her support 2 staff, excusable neglect can never rest solely on the excuse that the attorney s 3 staff erred. 4 attributable to factors that fall outside the bounds of his or her ordinary legal 5 responsibilities. Rather, to be excusable, the attorney s neglect must be 6 In analogous federal cases construing what constitutes excusable neglect, 7 the United States Circuit Courts and United States Supreme Court have refused 8 to deem neglect excusable when workplace disruptions are cited as the cause. 9 In United States v. RG&B Contractors, Inc. (C.A. 9, 1994), 21 F.3d 952, the 10 United States Ninth Circuit Court of Appeals rejected the contributing factor of 11 corporate restructuring as sufficient to deem a Fed.R.Civ.P. 60(b) movant s 12 neglect excusable. The movant in RG&B claimed that, as a result of recent 13 corporate restructuring and the subsequent hiring of a new collections officer 14 who was unfamiliar with its previous operations, invoices that would have 15 enhanced its judgment against a defaulting contractor s bonding company were 16 not timely presented to the district court. 17 movant s assertion that such neglect was excusable, stating that [e]ven a 9 The circuit court rebuffed the 1 liberal interpretation of excusable neglect will not excuse every error or 2 omission in the conduct of litigation. Id. at 956. The circuit court added that 3 the movant could not possibly contend that it was unaware of its own 4 corporate restructuring or unaware of the possibility that such activity could 5 cause some dislocations. Id. Implicit in the court s reasoning is that movant s 6 legal department should have safeguarded against the mistake and that failure 7 to do so was legally inexcusable. 8 Similarly, in Pioneer Invest. Serv. Co. v. Brunswick Assoc. L.P. (1993), 9 507 U.S. 380, 113 S.Ct. 1489, 123 L.Ed.2d 74, the United States Supreme 10 Court, while finding a Fed.R.Bankr.P. 9006(b)(1) movant s failure to timely 11 file a proof of claim excusable on other grounds, stated that it gave little 12 weight to the fact that counsel was experiencing upheaval in his law practice at 13 the time of the bar date.2 Id. at 398, 113 S.Ct. at 1499, 123 L.Ed.2d at 91. 14 In this case, it was not unreasonable or clearly erroneous for the trial 15 judge to determine that Schulman s neglect was not legally excusable. 16 Schulman had an obligation to ensure that he and his office staff would be able 17 to continue to handle routine administrative functions in the midst of the 10 1 disruption caused by his bookkeeper s retirement. Mr. Schulman alleged that, 2 due to that disruption, files were stacked all over the office. In addition, his 3 secretary was overworked, having to add new bookkeeping duties to her 4 already full work load. Mr. Schulman may not insist that the court excuse his 5 failure to ensure a smooth transition within his own office. Only the overlay of 6 extreme circumstances beyond a lawyer s reasonable contemplation should 7 suffice as Civ.R. 60(B) excusable neglect grounds in the context of staff error. 8 Such was not the case here. 9 To hold as the majority does today is to permit lack of diligence to 10 amount to a legal excuse. Mr. Schulman alleges a situation we have all 11 experienced upon losing a skilled secretary, paralegal, or associate attorney. 12 That situation, however, did not offer a legally cognizable excuse for 13 negligence; instead, it required Mr. Schulman to exercise extra efforts, hire 14 more help -- whatever it took to be sure no deadline was missed and no file 15 mislaid. Upon undertaking to represent Marc s, Mr. Schulman shouldered the 16 responsibility of safeguarding his client s interests. EC 6-4; DR 6-101(A)(3). 17 While Mr. Schulman was free to delegate his obligations in an appropriate 11 1 manner, he remained ultimately responsible for their completion. When the 2 inevitable error occurred as a result of his staff being overworked and the office 3 unorganized, it was not legally excusable. 4 Given that the movant failed to allege operative facts that would warrant 5 Civ.R. 60(B) relief, the trial court was not required to grant an evidentiary 6 hearing. 7 upholding the judgment of the trial court. 8 9 I would, therefore, affirm the judgment of the court of appeals, MOYER, C.J., concurs in the foregoing dissenting opinion. FOOTNOTE 10 1. While not dealing directly with Fed.R.Civ.P. 60(b), the Pioneer court 11 recognized the similarity of analysis required when determining whether 12 neglect is excusable within the meaning of Fed.R.Civ.P. 60(b)(1) or 13 Fed.R.Bankr.P. 9006(b)(1). 14 12

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