Background
Dick Lavy Trucking, Inc. and ScriptSourcing, LLC entered agreements under which ScriptSourcing would help lower costs associated with Dick Lavy Trucking’s self-funded insurance plan. After a fee dispute arose, Dick Lavy Trucking filed a declaratory-judgment action. The summons and complaint were served on ScriptSourcing’s CEO and registered agent at his home and separately at the company’s corporate office.
ScriptSourcing acknowledged receiving the documents but did not forward them to the attorney who had represented it during pre-suit settlement discussions or otherwise respond. It also took no action after receiving notice of a scheduling conference. The trial court entered default judgment and later denied ScriptSourcing’s motion for relief under Ohio Civil Rule 60(B), prompting the company’s appeal.
The Court’s Holding
The Second District affirmed, holding that the trial court did not abuse its discretion in finding no excusable neglect. ScriptSourcing offered no evidence that it had a corporate procedure for handling legal process that was inadvertently disregarded. Its CEO instead attributed the failure to act to laypeople’s misunderstanding of the documents’ importance, despite service at two locations and receipt of the scheduling notice.
The court also held that ScriptSourcing was not entitled to advance notice of the default application or a hearing under Civil Rule 55(A). Its attorney never entered an appearance in the action, and the attorney’s participation in pre-suit settlement discussions did not constitute an appearance. Judge Tucker separately concurred to emphasize that communications capable of establishing an informal appearance must occur after the lawsuit begins; pre-suit communications cannot constitute an appearance “in the action.”
Key Takeaways
- A company’s acknowledged receipt of legal process, followed by an internal failure to act, does not necessarily constitute excusable neglect under Civil Rule 60(B).
- A corporate defendant relying on an internal-processing explanation should present evidence of an established procedure for handling legal process and show that the procedure was inadvertently not followed.
- Pre-suit settlement communications do not amount to an appearance triggering Civil Rule 55(A)’s notice requirement for a default application.
Why It Matters
The decision underscores that retaining counsel for pre-suit negotiations does not shift responsibility for responding to a later-filed complaint when counsel has not appeared in the action. Businesses must promptly route summonses, complaints, and court notices to litigation counsel.
It also clarifies the timing boundary for informal appearances in Ohio default proceedings: post-filing communications may demonstrate an intent to defend and trigger notice protections, but pre-suit communications do not.