Background
Layannoor, Inc., which operated a convenience store in a leased building damaged by fire, sued United Ohio Insurance Co. and its agent over an insurance dispute. The policy identified Layannoor as the building’s owner rather than as a tenant and did not include the owner as an additional insured. United Ohio counterclaimed for $100,000 it had paid under the belief that Layannoor owned the property.
Layannoor’s attorneys withdrew after losing contact with the company’s principals. The trial court ordered the corporation to retain new counsel, but Layannoor did not do so or participate in the litigation. After a default hearing, the court dismissed Layannoor’s claims without prejudice, declared the policy void, and entered a $100,000 judgment for United Ohio. Layannoor later obtained counsel and secured Civ.R. 60(B) relief based on claimed excusable neglect.
The Court’s Holding
The Eighth District reversed. It held that Layannoor did not establish excusable neglect under Civ.R. 60(B)(1), a necessary element for relief from judgment. Its representative knew counsel was withdrawing, approved the withdrawal, and deliberately chose not to retain replacement counsel until the final pretrial conference despite ongoing discovery and other pretrial obligations.
That conduct was a conscious disregard of the litigation, not an unexpected or unavoidable hindrance. Layannoor could have protected itself by retaining counsel or seeking more time from the court. The appellate court therefore reinstated the final judgment for United Ohio.
Key Takeaways
- A corporation must be represented by licensed counsel in Ohio litigation.
- Choosing to leave a case unattended after counsel withdraws is not excusable neglect under Civ.R. 60(B)(1).
- Courts must balance deciding cases on the merits against the finality of judgments.
Why It Matters
The decision underscores that Civ.R. 60(B) does not relieve a party from the consequences of consciously abandoning active litigation. Notice disputes did not excuse Layannoor because its representative knew it needed replacement counsel and chose not to act.
For insurers and other litigants, the ruling confirms that a default judgment may stand where the opposing party’s own inattention—not a lack of knowledge of the case—caused the default.