Excusable Neglect Defeats Default Judgment
Post 4941
See the full video at https://rumble.com/v5xlxk8-excusable-neglect-defeats-default-judgment.html and at https://youtu.be/PJw0X83YOaQ
CORPORATION SHOULD CONTROL ITS EMAIL
Natalia Davidenko appealed from the December 13, 2023 “Judgment Entry Granting Defendants’ King’s Landscape Motion for Relief from Judgment and Leave to File Answer Instanter” of the Stark County Court of Common Pleas. In Natalia Davidenko v. King’s Landscape & Bobcat Work, LLC, et al., No. 2024CA00006, 2024-Ohio-5577, Court of Appeals of Ohio, Fifth District, Stark (November 26, 2024) the Court of Appeals acted fairly.
FACTS
This case arose when DeVault was operating a dump truck owned by his employer, defendant King’s, and lost control of the vehicle, causing considerable damage to Davidenko’s property.
Davidenko filed a claim with King’s insurance company, Liberty Mutual, and received payment in the amount of $45,861.03. This amount did not fully compensate Davidenko’s damages and she filed suit against appellees on July 13, 2023. Service was completed against both appellees by certified mail: service on DeVault was perfected on July 21, 2023 and service on King’s was perfected on July 27, 2023.
Neither Appellee answered and Davidenko moved for default judgment. The motion was granted and at a damages hearing the trial court found Davidenko was entitled to damages in the amount of $179,394.76 plus interest.
On November 22, 2023, appellees filed motions for relief from default judgment. Appellees’ motion for relief from default judgment included an affidavit of Laura Lee, an office employee of King’s, offering an explanation why appellees failed to timely answer Davidenko’s complaint. Service at the statutory agent was perfected but King’s remained unaware of the lawsuit because Lee never received or viewed any notice of the lawsuit from the statutory agent.
Upon receipt of the default judgment, King retained counsel and a single email from the statutory agent notifying King’s of the receipt of legal documents and containing a link to those documents in a document repository was located into King’s “junk” email and was overlooked by the company.
Upon learning of the suit from DeVault, David King delivered the lawsuit documents to Lee and the company’s agent at Busha-Okeson Insurance Agency, who retained counsel on appellees’ behalf who filed the ensuing motions for relief. On December 13, 2023, the trial court granted appellees’ motions for relief from judgment and leave to file their answer instanter.
ANALYSIS
When the defendant fails to plead or otherwise defend an action, default judgment may be granted. To prevail on a motion for relief 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 the statute and (3) the motion is made within a reasonable time, and, where the grounds of relief are not more than one year after the judgment, order or proceeding was entered or taken.
The decision whether to vacate a judgment rests within the trial court’s discretion and will not be reversed absent an abuse of discretion. An abuse of discretion is more than simply an error of law, but rather implies that the trial court’s attitude was unreasonable, arbitrary, or unconscionable.
The Ohio Supreme Court has advised, though cautiously, that where a defendant presents a meritorious defense in a timely manner, any doubt on the categorization of neglect should be resolved in favor of the motion to set aside the judgment so that cases can be decided on their merits.
Regarding King it is the general principle that relief from default judgment may be granted on excusable neglect when service is properly made on a corporation, but a corporate employee fails to forward the summons and complaint to the appropriate person.
The trial court found King’s employee’s affidavit was credible. It is well-settled that it is for the trier of fact to judge the credibility of the witnesses and not for a reviewing court. In the absence of evidence which reveals a complete disregard for the judicial system and the rights of their adversary, appellees’ motion was properly determined by the court. A finding of “excusable neglect” will stand absent a showing of an abuse of discretion and generally the concept of excusable neglect must be liberally construed.
The Court of Appeals concluded that the trial court did not abuse its discretion in finding that excusable neglect existed in this case and it is reasonable to conclude from the record that appellees, and those acting on their behalf, did not show disregard for the judicial system or Davidenko’s rights.
The order of the Stark County Court of Common Pleas was affirmed.
The insurer who settled with the plaintiff, Davidenko, did not obtain a release for the funds paid to Davidenko on behalf of the Kings defendants. Why can only be considered inept claims handling. That insurer then obtained counsel on behalf of Kings, removed the default judgment and is now defending the suit. A competent adjuster would have reached a settlement withing the limits available and defended its insured if it could not obtain an agreed settlement.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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