^/ %

IN THE SUPREME COURT OF OHIO

BERNARD NIEDERST,

Relator,

V.

RICHARD J. McMONAGLE,

Respondent.

Supreme Court Case No. 14-1119

ORIGINAL ACTION INPROHIBITION

MOTION FOR JUDGMENT ON THE PLEADINGS

Michael StavnickyT. Christopher O'ConnellSINGERMAN, MILLS, DESBERG& KAUNTZ CO., L.P.A.3333 Richmond Road, Suite 370Beachwood, Ohio 44122

Counsel for Relator Bernard Niederst,

Timothy McGintyCharles HannanJustice Center Bld. Floor 8th and 9th1200 Ontario StreetCleveland, Ohio 44113

Counsel for Respondent

Jon J. Pinney (0072761) (COUNSEL OF RECORD)Justine Lara Konicki (0086277)KOHRMAN JACKSON & KRANTZ PLLOne Cleveland Center - 20th Floor1375 East Ninth StreetCleveland, Ohio 44114Telephone: (216) 696-8700Fax: (216) 621-6536

Counsel for Proposed Intervenors David B. Niederst, Michael D. Niederst, Niederst

Ma,nagement, Ltd., Niederst Management Group, Ltd., Niederst Management Group 11,

Ltd., Niederst Management Group III, Ltd., Niederst Management Group IV, Ltd.,Henninger Apartments, LLC, Niederst Olde River Yacht Club, LLC, Niederst Wyoga

Lake, LLC, Niederst Richmond Park, LLC, Niederst Blossom Village, LLC, Frv-Elyria,

LLC, Ec;ergreen Residential Partners, LLC, Niederst Parnia Woods Apartments, LLC,

Sunset Townhouses, LLC, Niederst Bent Tree, LLC, Niederst Irtdian Hills, LLC,Niederst Erie Shore, LLC, 12834-12836 State Rd, LLC, Niederst Lake Park Towers,LLC, Niederst Richmond Hills, LLC, Niederst Fore.st, .Ridge,jLLC, Westburv Holdin^s^, ^

LLC'

and 980011 N'J I ^S ff..

(K0391867.1}1 OCT 0 8 2014

GL^^^ ^^ COURT

MOTION FOR JUDGMENT ON THE PLEADINGS

Pursuant to Civ.R. 12(C), David B. Niederst, Michael D. Niederst, Niederst

Management, Ltd., Niederst Management Group, Ltd., Niederst Management

Group II, Ltd., Niederst Management Group III, Ltd., Niederst Management Group

IV, Ltd., Henninger Apartments, LLC, Niederst Olde River Yacht Club, LLC,

Niederst Wyoga Lake, LLC, Niederst Richmond Park, LLC, Niederst Blossom

Village, LLC, Frv-Elyria, LLC, Evergreen Residential Partners, LLC, Niederst

Parma Woods Apartments, LLC, Sunset Townhouses, LLC, Niederst Bent Tree,

LLC, Niederst Indian Hills, LLC, Niederst Erie Shore, LLC, 12834-12836 State Rd,

LLC, Niederst Lake Park Towers, LLC, Niederst Richmond Hills, LLC, Niederst

Forest Ridge, LLC, Westbury Holdings, LLC, and 9800 Tower, LLC (collectively, the

"Nied,erst, Parties") respectfully request that this Court enter judgment on the

pleadings. A memorandum in support follows.

2

MEMORANDUM IN SUPPORT

I. SUMMARY OF THE ARGUMENT

This Court should enter judgment on the pleadings against Relator and in

favor of the Respondent and Niederst Parties because:

• Relator is not entitled to a Writ of Prohibition or Procedendo:

o Respondent does not patently and unambiguously lack jurisdiction:

n The Eighth District Court of Appeals reversed and remandedthe underlying action to the trial court for "further proceedingsconsistent with this opinion"; and

n Assuming, arguendo, that the Eighth District Court of Appealsdid not remand the underlying action, a Civ.R. 60(B) Motion is acollateral attack on a final judgrnent;

o The Relator has an adequate remedy readily available to him at law-a direct appeal to the Eighth District Court of Appeals from anydecision Respondent may render in the trial court.

1. FACTS

The cognovit note (the "Note") on which Relator wrongfully took judgment,

was executed in. connection with a confidential settlement agreement (the

"Settlement Agreement") that ended the litigation styled Niederst 111anugement,

Ltd., et al. v. Bernard Niederst, Cuyahoga County Court of Common Pleas Case No.

CV-11-767343. The Note is payable in equal quarter-million dollar installments due

on January 5, 2013, January 5, 2014, January 5, 2015 and January 5, 2016. See

Compl. at Exh. 2. The Niederst Parties have paid Relator every penny of the

January 5, 2013 and January 5, 2014 installments, totaling $521,684.38. See

Proposed Ans. at 116.

When making the initial 2013 installment payment, there was a less than

one month delay in the payment of nominal interest (which totaled less than

tk0391867.1}

$7,000) because: (1) the Note is not dated and, therefore, the interest was not

readily calculable; (2) the parties never agreed to an amortization or payment

schedule that clearly set forth the amount of nominal interest due, leaving the

Niederst Parties to request and then make the nominal. interest calculation;

(3) none of the parties knew when the interest calculation was supposed to start

because there was a delay in the execution of the confidential Settlement

Agi°eement, which governs and controls the interpretation of the Note; and (4) the

confidential Settleznent Agreement is ambiguous as to the timing of the payment of

nominal interest and, in fact, is inconsistent with the Note. See Compl. at Exh. 2.

Despite this situation, the Niederst Defendants timely made the January 5, 2013

$250,000 installment payment and made the nominal interest payment on

February 1, 2013.1

The Niederst Parties fi.ally set forth these facts and the law supporting their

request from relief from judgment in the 60(13) Motion. A copy of the 60(B) Motion

and the Niederst Parties' Reply were filed under seal with the Cuyahoga County

Court of Common Pleas and, accordingly, are not attached. Relator then filed this

action, which has prevented the Respondent from conducting a hearing or ruling on

the 60(B) Motion.

1 At least one Ohio court has held that a party may only obtain a cognovit judgmentunder R.C. 2323.13 for a default of nonpayment. Henry County Bank U. Stimmels,Inc., 3rd Dist. Henry No. 7-12-19, 2013-Ohio-1607. Moreover, as fully briefed in the60(B) Motion filed with the trial court, the Niederst Parties have not committed anynon-monetary events of default. All of Relator's arguments contained in hisOpposition to the Motion to Dismiss concerning monetary and non-monetarydefaults is pure dicta and not part of the record.

2

II. PROCEDURAL HISTORY

On October 2, 2013, Relator filed his Complaint seeking a cognovit judgment

against the Niederst Parties in the action styled Bernard Niederst v. David B.

Nieder~st, et al., Cuyahoga County Court of Common Pleas Case No. CV-13-814870

(the "Lawsuit"). In the Complaint, Relator only alleged that "Defendants defaulted

under the terms of the Note and as a result thereof Defendants are immediately

liable for the balance of the Note." Relator did not allege, cite or otherwise aver that

there was a specific breach of the Note. That same day, the trial court entered the

cognovit judgment." The following week, on October 9, 201.3, and after hearing the

Niederst Parties' oral motion for relief from judginent, the court granted relief from

the judgment, vacating it in its entirety. 3 The Relator appealed.

On June 5, 2014, the Eighth District Court of Appeals found that, due to the

"sparse record" it had "no choice but to sustain the first assignment of error." See

Ni.e,derst v. Ni,ederst, 8th Dist. Cuyahoga No. 100616, 2014-Ohio-2406, 1( 4. The

Eighth District's opinion was purely procedural and drew no conclusions concerning

the merits of the Niederst Parties' position. Instead, the court held that "[t]his cause

2 The relator did not "win at trial." See Relator's Opp. to Motion to Dismiss at p. 10("[Relator] has already won at trial.") The underlying case concerns a cognovitjudgment, there was no trial in the underlying case.

3 Judge McMonagle has jurisdiction over the original underlying judgment and isthe proper judge in this action."[I]t is the longstanding custom in The CuyahogaCounty Common Pleas Court for the administrative judge to handle the issuance ofjudgment on cognovit notes." Ohio Carpenters' Pension Fund u. La Ctr., LLC, 8thDist. Cuyahoga Nos. 86597, 86789, 2006-Ohio-2214, 11 27. A judgment entry on acognovit note is "merely a ministerial function, which [does] not require theadministrative judge to exercise personal judgment or discretion." Id. at ¶ 26.

3

is reversed to the trial court for fizrther proceedings consistent with this opinion."

Id. at 115.

As a result of the Eighth District Court ofAppeals' journal entry and opinion,

the Niederst Parties filed motions with the trial court, including the 60(B) Motion

and a motion to stay judgment. On June 24, 2014, the trial court granted the

Niederst Parties' motion to stay judgment and subsequently set a. hearing on the

60(B) Motion for Monday, July 7, 2014.

On or about July 3, 2014,.and without providing any notice to the

undersigned, Relator filed his Complaint for a Writ of Prohibition and Procedendo

(the "Writ") seeking to prevent the Honorable Judge Richard McMonagie, Judge of

the Cuyahoga County Court of Common Pleas ("Res.pond,ent"), from continuing to

preside and have j urisdiction over the case. See Compl. at p. 1. Plaintiff filed the

Writ even though the Eighth District's journal entry and opinion provided that the

case was reversed "to the trial court for, further proceedings consistent with

this opinion." See Niederst at ^J 5 (emphasis added). Moreover, Plaintiff ignored the

procedural posture of this cognovit action and the purpose and mechanism behind a

Civ.R. 60(B) Motion, which, inherently, is a motion seeking relief from a final

judgment.

I1L LAW & ARGUMENT

A) Standard of Review

Pursuant to Ci.v.R. 12(C), after the close of the pleadings but within a time

period so as not to cause delay, "any party may move for judgment on the

4

pleadings." Similar to a Civ.R. 12(B)(6) motion, a Civ.R. 1.2(C) motion resolves

questions of law while allowing the reviewing court to consider the substance of

both the complaint and the answer. State ex rel. Midwest Pride Iti; Inc. v. Pontious,

75 Ohio St.3d 565, 569-70, 665 N.E.2d 931 (1996); Rayess u. Educ. Comm'n for

Foreign Med. Graduates, 134 Ohio St.3d 509, 2012-Ohio 5676, ¶ 18.

To grant a Civ.R. 12(C) motion, the court must: (1) construe the material

allegations in the complaint in favor of the non-moving party; and (2) find beyond

doubt that the non-moving party can prove no set of facts that would entitle him to

relief. State ex rel. Midwest at 570. If both these conditions are met, it is appropriate

for the reviewing court to dismiss the action and grant judgment as a matter of law

in favor of the movant. Id.

B) Relator is Not Entitled to a Writ of Prohibition or Procedendo

Denial of Relator's writ of prohibition is proper. In order for a party to prevail

on a writ of prohibition, a relator must demonstrate that:

1) The court in question is "about to exercise judicial power";

2) Exercising that judicial power is "unauthorized by law"; and

3) The court's "denial of the writ will cause injury for which no other legalremedy exists." State ex rel. Lee v. Trunibull County Probate Court, 83Ohio St.3d 369, 372, 700 N.E.2d 4 (1998).

When determining whether a court's action is unauthorized by law, Ohio

courts have repeatedly recognized that trial courts have the inherent authority to

determine their own jurisdiction. State ex rel. Danziger v. Yarbrough; 6th Dist.

Sandusky No. S-06-034, 2006-Ohio-6811, ¶ 12 (citing Ruessman v. Flanagan, 65

Ohio St.3d 464, 465, 1992-Ohio-79, 605 N.E.2d 31); State ex rel. Vanni v.

5

1VIcMonagle, 8th Dist. Cuyahoga No. 99507, 2013-Ohio-500, ¶ 5; U'isner U. Probate

Court of Coluinbiana County, 145 Ohio St. 419, 422, 61 N.E.2d 889. Accordingly, a

trial court is "unauthorized by law" to act and a writ will lie only if the judge in the

underlying case is patently and unambiguously without jurisdiction. State ex rel.

Lee at 372; State ex rel. Leonetti v. Cornnion Pleas Court, 11th Dist. Geauga No. 98-

G-2166, 1998 Ohio App. LEXIS 6270, "12-13 (Dec. 24, 1998).

As to the third prong, Ohio courts have repeatedly found that an appeal is an

adequate legal remedy and, therefore, a writ will not lie if a direct appeal is

avai.lable to the Relator. See State ex rel. Utley v. Abruzzo, 17 Ohio St.3d 203, 204 -

205, 478 N.E.2d 789 (1985); State ex rel. Timson v. Latshutka, 10th Dist. (Franklin)

No. 96APD11-1568, 1997 WL 65536 (February 11, 1997); Danziger at ¶ 14 ("a party

challenging a court's jurisdiction possesses a remedy at law by means of a direct

appeal of the court's jurisdiction."); State ex rel. Dannaher v. Crawford, 78 Ohio

St.3d 291, 678 N.E.2d 549 (1997) ("appeal following a final judgment provides an

adequate legal remedy").

A relator is entitled to a writ of Procedendo if he demonstrates a clear legal

right to require the court to proceed, a clear legal duty on the part of the court to

proceed, and the lack of an adequate remedy in the ordinary course of the law. State

ex rel. Williarns u. Hunter, 138 Ohio St.3d 511, 2014-Ohio-1022.4

4 It is unclear wliat action the Relator is requesting that the Respondent take and,therefore, Relator's request for Procedendo is not discussed at length. However,because Relator has an adequate remedy at law, as discussed below, his request fora writ of procedendo fails.

6

Here, the writs fail because Respondent is not patently and unambiguously

without jurisdiction and because the Relator has an adequate remedy at law-a

direct appeal from any judgment the Respondent may render in the underlying

action.

C) Respondent does not patently and unambiguously lackjurisdiction.

Clearly, Respondent has the power and authority to determine his own

jurisdiction in the underlying action and, therefore, the writ cannot lie. As set forth

in R.C. 2305.01, the courts of common pleas are Ohio's courts of general jurisdiction

and have original jurisdiction in all cases where the sum or matter in dispute

exceeds the jurisdiction of county courts. The courts of common pleas are also

authorized by R.C. 2323.13 to review warrants of attorney and enter confessions of

judgment. Prior to Relator's filing of the writ, Respondent attempted to exercise the

authority and jurisdiction granted to him to hold a hearing and rule on the Niederst

Parties' Civ.R. 60(B) Motion. Alternatively, Respondent is exercising his jurisdiction

to hear and rule upon the Niederst Parties' Civ.R. 60(B)1Vlotion for relief from a

f inal judgment.

1. The trial court is not patently and unambiguouslywithout jurisdiction because the Eighth District Court ofAppeals reversed and remanded the underlying action.

Respondent is not patently and unambiguously without jurisdiction-the

effect of the Eighth District Court of Appeal's decision in Niederst was to reverse

and remand the action to the trial court. Specifically, the fifth paragraph of the

decision in ii%ieder°st provides: "This cause is reversed to the trial court for further

7

proceedings consistent with this opinion." Niederst, 2014-Ohio-2406 at 1( 5.5 A

review of decisions from the Eighth District evidences that the language used in

Niederst is identical to language used in other recent decisions and that the effect of

that language was to reverse and remand the action. See State v. Cornicl,, 8th Dist.

Cuyalioga No. 919600; 2014-Ohio-2049; In re D.S., 8th Dist. Cuyahoga No. 99600,

2013-Ohic>-5740.

In re D.S., 2013-Ohio-5740, is especially instructive. In In re D.S., a juvenile

defendant was charged with carrying a concealed weapon and discharging a firearm

into a habitation. The defendant argued the police lacked probable cause to stop and

frisk him and filed a motion to suppress the evidence of the rifle, which the trial

court granted. The Court reversed the trial court's ruling that granted the

defendant's motion to suppress evidence. In reversing and remanding the case to

the trial court, the Court used language identical to that in Niederst-"[t]his cause

is reversed to the trial court for further proceedings consistent with this opinion."

Id. at jC 18. If the Court's opinion in In Re D.S. did not operate as a reverse and,

remand to the trial court then the case would be in limbo-the trial court's ruling on

5 On July 14, 2014, the Niederst Parties filed a Motion for Clarification with the EighthDistrict Court of Appeals. On July 15, 2014, the Niederst Parties filed a direct appeal tothe Court, seeking a review and a determination on the Eighth District Court ofAppeals' decision in Niederst. On July 23, 2014, the Eighth District Court of Appealsdenied the motion for clarification but provided no basis for the denial. The EighthDistrict's opinion totals seven words and provides: "Motion by appellee for clarificationis denied." No conclusion can be drawn from this decision; it is unknown whether themotion was denied. based on procedural grounds or substantive grounds. The NiederstParties respectfully submit that the Eighth District denied the motion because it wasevident from the language used in the decision that the effect was a reverse andremand to the trial court.

8

the motion to suppress, and the state's appeal, occurred prior to trial and there was

no final judgment.

In the underlying case, like in D.S., the Eighth District ordered that "[t]his

cause is reversed to the trial court for further proceedings consistent with this

opinion," which operated to remand the case to the trial court. After stating that the

case is returned to the trial court, the Eighth District's opinion in Niederst then

provided:

It is ordered that a special mandate issue out of this courtdirecting the Cuyahoga County Court of Common Pleas tocarry this judgment into execution. A certified copy oftliis entry shall constitute the mandate pursuant to R.ule27 of the Rules of Appellate Procedure.

Niederst at ¶ 5. A. review of recent decisions from the Eighth District Court of

Appeals d.emonstrates that this language does not indicate that the judgment is

final or that the Niederst Parties are prohibited from filing a Civ.R. 60(B) Motion

for Relief from Judgment. Instead, this language is standard boilerplate and does

not have any precedential value or effect on the disposition of the case. See Saffold

v. Croom, 8th Dist. Cuyahoga No. 100806, 2014-Ohio-3241, ¶ 15 (reversing and

remanding to the trial court and providing: "[i]t is ordered that a special mandate

be sent to said court to carry this judgment into execution."); State v. L.S., 8th Dist.

Cuyahoga No. 100793; 2014-Ohio-3240, ¶ 7 (reversing and remand to the trial court

and providing "[i]t is ordered that a special mandate issue out of this court directing

the common pleas court to carry this judgment into execution."); Klik v. Moyer, 8th

Dist. Cuyahoga No. 100576, 2014-Ohio-3236, ¶ 18 (affirming the trial court and

providing: "[i]t is ordered that a special mandate issue out of this court directing the

9

common pleas court, domestic relations division, to carry this judgment into

execution."); Alden v. FirstEnergy Corp., 8th Dist. Cuyahoga No. 100575, 2014-Ohio-

3235, ¶ 14 (vacating judgment and providing: "[i]t is ordered that a special mandate

be sent to the court of common pleas to carry this judgment into execution.").

Accordingly, the Eighth District Court of Appeals in Niederst, like in In re D.S.,

reversed and remanded the action to the trial court for further proceedings. Under

these circumstances Respondent does not patently and unambiguously lack

jurisdiction.

2. Assuming, arguendo, the Eighth District Court of Appeals didnot remand the underlying action, the trial court hasjurisdiction because a Civ.R. 60(B) Motion is a collateral attackon a final judgment.

Because a Civ.R. 60(B) Motion is a collateral attack on a final judgment, even

assuming the Eighth District did not remand the action in ATiederst, the Respondent

has jurisdiction to consider the Niederst Parties' motion. R.C. 2323.13 governs the

entry of cognovit. judgments and courts of common pleas have the jurisdiction and

authority to grant relief under Civ.R. 60(B) when judgment has been entered on a

cognovit note. ABL 4Vholesale Distribs., Inc. v. Gas, 8th Dist. Cuyahoga No. 100256,

2014-Ohio-2268, ¶ 9.

Civ.R. 60(B) specifically allows a party to collaterally attack a legally valid

and final judgment. "Civ.R. 60(B) is a remedial rule entitled to liberal construction

with a view toward effecting a just result." Int'l, Lottery v. Kerouac, 102 Ohio App.3d.

660, 666, 657 N.E.2d 820 (5th Dist.1995). Civ.R. 60(B) provides, in relevant part:

10

On motion and upon such terms as are just, the court mayrelieve a party or his legal representative from a finaljudgment, order or proceeding for the following reasons:(1) mistake, inadvertence, surprise or excusable neglect;(2) newly discovered evidence which by due diligencecould not have been discovered in time to move for a newtrial under Rule 59(B); (3) fraud (whether heretoforedenominated intrinsic or extrinsic), misrepresentation orother misconduct of an adverse party; (4) the judgmenthas been satisfied, released or discharged, or a priorjudgment upon which it is based has been reversed orotherwise vacated, or it is no longer equitable that thejudgment should have prospective application; or (5) anyother reason justifying relief from the judgment.

At least one Ohio court has specifically held that, when a case is reversed for

procedural reasons, a court has the authority to grant a Civ.R. 60(B) motion and

decide the case on the merits. Amato v. Krob, 8th Dist. Cuyahoga No. 46492, 1983

Ohio App. LEXIS 12747, *6-8 (Sep. 8, 1983). In Amato, a patrolman was discharged

from his employment with the Cleveland Police Department. The patrolman

appealed that decision to the civil service commission, which modified the discharge

to a four and a half year suspension. Id. Subsequently, the safety director appealed

the civil service commission's decision to the Cuyahoga County Court of Common

Pleas. Id. However, the commission failed to file a record as required by the statute,

and the trial court, therefore, reversed the commission's decision and reinstated the

patrolman's discharge. The patrolman then filed a Civ.R. 60(B) motion to vacate the

judgment. Id. The trial court granted the Civ.R. 60(B) motion, and the safety

director appealed the decision to the Eighth District Court of Appeals. In upholding

the trial court's decision to vacate, the Eighth District specifically held that the

11

parties did not litigate the merits of the appeal and that the trial court acted within

its discretion in vacating the judgment pursuant to Civ.R. 60(B). Id.

Here, like in Amato, Respondent has the power and authority to consider the

Niederst Parties' collateral motion and, therefore, Respondent does not patently and

unambiguously lack jurisdiction. The Niederst Parties' Civ.R. 60(B)1Vlotion is,

inherently, a request that the Court set aside the final judgment, The Ohio Rules of

Civi.l Procedure specifically allow the Respondent to consider the motion and to

make such rulings as are just and proper.

B. The Relator has an adequate legal remedy readily available to him-a direct appeal to the Eighth District Court of Appeals.

"It is axiomatic that a direct appeal of right constitutes a plan and adequate

remedy in the original case of the law, the existence of which is fatal to a request for

the extraordinary remedy of Procedendo." State ex rel. Utley v. Abruzzo, 17 Ohio

St.3d 203, 204 - 205, 478 N.E.2d 789 (1985) (internal citations omitted); see also

State ex rel. Dannaher v. Crawford, 78 Ohio St.3d 291, 678 N.E.2d 549 (1997)

("appeal following a final judgment provides an adequate legal remedy"). Similarly,

"prohibition will not lie against a trial judge who has subject matter and in

personam jurisdiction to prevent an erroneous judgment or to prevent the

enforcement of an allegedly erroneous judgment. State ex rel. Timson v. Latshutka,

10th Dist. (Franklin) No. 96APD11-1568, 1997 WL 65536 (February 11, 1997).

Here, Relator has a plain and adequate remedy at law, a direct appeal from any

entry that Respondent may enter.

12

IV. CONCLUSION

For the foregoing reasons, the Niederst Parties respectfully request that this

Court enter judgment in favor of the Niederst Parties and deny Relator's request for

the issuance of a Writ of Prohibition and Writ of Procedendo.

Respectfully submitted,

;°`7 l3 ^

By::% 'Jon J. Pinney (0072761), Counsel of Record

Justine Lara Konicki (0086277)KOHRMAN JACKSON & KRANTZ PLLOne Cleveland Center - 20th Floor1375 East Ninth StreetCleveland, Ohio 44114

Counsel for Proposed Intervenors

13

CERTIFICATE OF SERVICE

The undersigned counsel hereby certifies that on this 7th day of October, 2014, a

copy of the foregoing was sent via Regular U.S. Mail, postage prepaid, to the

following:

Michael StavnickyT. Christopher O'ConnellSingernian, Mills, Desberg & Kauntz Co., L.P.A.3333 Richmond Road, Suite 370Beachwood, Ohio 44122

Counsel for Relator Bernard Niederst

Timothy McGintyCharles HannanJustice Center Bld. Floor 8th and 9th1200 Ontario StreetCleveland, Ohio 44113

Counsel for Respondent Judge Richard McMonagle

fustine Lara Konicki

14