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The Frustrations of Trying to Collect on a Judgment, as Illustrated by Broadmoor Ctr., L.L.C. v. Dallin

The difficulty of collecting a judgment is major reason that a lot of cases settle. Ohio's Tenth District Court of Appeals recently decided the case of Broadmoor Ctr., L.L.C. v. Dallin, 2016-Ohio-8541 (10th Dist. Franklin), which illustrates some of the challenges plaintiffs face. 

In this case, the Plaintiff (Broadmoor Center), appealed orders 1) finding the "garnishment of property other than personal earnings" Broadmoor filed against the Defendants (Mohamud Dallin and Bargain Cleaners, Inc.) to be defective and void, 2) awarding attorney fees to Dallin, 3) granting Dallin's motion for attorney fees, 4) denying Broadmoor's motion to hold Dallin in contempt, and 5) sua sponte striking Broadmoor's creditor's bill.

The basic facts were as follows:

I. Facts and Procedural History

{¶ 2} On December 22, 2009, Broadmoor obtained a default judgment against Dallin and Bargain Cleaners, jointly and severally, in the amount of $63,604.84 plus interest related to back rent and damages from Dallin's dry cleaning business. After several years, Broadmoor learned Dallin had been operating a sole proprietorship called Mohamud Dallin, d.b.a. Golden Age Day Care Service, though Broadmoor characterized the sole proprietorship as an unregistered, fictitious name. Broadmoor further learned Golden Age Day Care Service had a contract with the city of Columbus (“the city”) to provide adult day care services.

A. Wage Garnishment

{¶ 3} On October 31, 2014, Broadmoor filed a wage garnishment for Dallin's personal earnings, listing Golden Age Home Health and Adult Day Care Services (“Golden Age”) as the garnishee, and serving the notice of wage garnishment on Dallin. When neither Dallin nor Golden Age answered or responded to the wage garnishment, Broadmoor filed a motion to show cause on June 19, 2015 asking the trial court to hold Golden Age in contempt of the wage garnishment order. The trial court issued a June 26, 2015 order directing a representative of Golden Age to appear at a July 31, 2015 hearing and show cause why Golden Age should not be held in contempt. On the date of the scheduled show cause hearing, neither Dallin nor a representative of Golden Age appeared.

{¶ 4} At Broadmoor's request, the trial court issued a capias warrant on September 24, 2015 for Dallin, though we note the capias does not appear in our record. Subsequently, on October 26, 2015, Dallin filed a motion to vacate the capias and award attorney fees, arguing (1) the capias did not appear in the trial court's online docket or in the hard copy case file maintained by the Franklin County Clerk of Courts, (2) the court's order from June 26, 2015 did not order Dallin, specifically, to appear at the hearing, just an unnamed representative of Golden Age, and (3) the June 26, 2015 order contained an incorrect address for Dallin, thus raising a possible service issue. Broadmoor did not file a response to Dallin's motion to vacate the capias. In a December 1, 2015 order, the trial court granted Dallin's motion to vacate the capias and to award attorney fees.

B. Creditor's Bill

{¶ 5} On November 2, 2015, while the wage garnishment was pending, Broadmoor filed a creditor's bill under the same case number, and Dallin filed an answer on November 4, 2015. Broadmoor then filed a formal motion requesting a hearing on the creditor's bill on March 12, 2016. Ultimately, on June 3, 2016 the trial court sua sponte struck the creditor's bill and found moot Broadmoor's motion to schedule a hearing on the creditor's bill.

C. Garnishment of Property Other Than Personal Earnings and Related Filings

{¶ 6} On March 8, 2016, Broadmoor filed an order and notice of garnishment of property other than personal earnings against Dallin, listing the city's Treasurer's Office as the garnishee and seeking “any and all funds due to Mohamud Dallin d/b/a Golden Age Day Care Services.” However, when Broadmoor filed its notice to Dallin, the judgment debtor, Broadmoor filed a notice of wage garnishment rather than a notice of garnishment of property other than personal earnings. Dallin filed a request for a garnishment hearing, alleging improper service and “any other defenses applicable to this matter.” (Mar. 28, 2016 Request for Hearing.) On April 5, 2016, the city answered the garnishment and deposited $41,493.21 with the clerk of courts.

{¶ 7} On April 12, 2016, the magistrate conducted a hearing on the March 8, 2016 order and notice of garnishment of property other than personal earnings.1 In an April 29, 2016 decision, the magistrate concluded (1) the garnishment filed March 8, 2016 was defective due to Broadmoor's failure to strictly comply with the notice provisions for garnishment of personal property other than personal earnings provided in R.C. Chapter 2716, and (2) the garnishment was void because it was issued to the city, which was administering a state obligation. The magistrate ordered the clerk of courts to release the $41,493.21 deposited in this matter back to the city.

{¶ 8} On May 13, 2016, Broadmoor filed objections to the magistrate's decision and Dallin filed a response to the objections on May 19, 2016. In a June 1, 2016 judgment entry, the trial court overruled Broadmoor's objections and adopted the magistrate's decision of April 29, 2016, ordering “(1) The Garnishment filed on March 8, 2016 was defective; (2) The Notice given to defendant Dallin failed to meet the strict requirement of the statute; (3) The Garnishment was issued to the City of Columbus who was administering a state obligation and was therefore void;” and (4) ordering the clerk of courts to release the $41,493.21 deposited with the court back to the city. (June 1, 2016 Jgmt. Entry.) 

D. Contempt

{¶ 9} On March 12, 2016, Broadmoor filed a motion to hold Dallin in contempt, alleging Dallin perjured himself in his deposition and that the alleged perjury renders Dallin in contempt for Golden Age's failure to file an answer to the October 23, 2014 garnishment order. The trial court ultimately denied that motion in a June 3, 2016 decision and entry. 

E. Attorney Fees

{¶ 10} In a December 1, 2015 order, the trial court granted Dallin's motion to vacate the capias and to award attorney fees. Broadmoor subsequently filed several motions including a motion to vacate the trial court's order vacating the capias, a motion to compel discovery, a motion for a protective order, and a motion for attorney fees. Dallin opposed each of these motions and sought the award of additional attorney fees related to Broadmoor's filing of the motion to vacate the trial court's vacation of the capias. In a February 26, 2016 decision and entry, the trial court denied each of Broadmoor's motions and granted Dallin's request for additional attorney fees. 

{¶ 11} On April 21, 2016, the magistrate issued a decision determining the amount of attorney fees Broadmoor owed to Dallin. The magistrate awarded Dallin $1,268.50 in attorney fees related to the trial court's order to vacate the capias plus $4,130.00 in attorney fees and sanctions related to Broadmoor's “frivolous” motion to vacate the trial court's order vacating the capias. Broadmoor filed objections to the magistrate's decision and Dallin responded and requested additional attorney fees related to counsel's work in responding to Broadmoor's objections. 

{¶ 12} On June 3, 2016, in addition to ruling on the motion for contempt and the creditor's bill, the trial court adopted the magistrate's April 21, 2016 decision awarding attorney fees, and granted Dallin's motion for attorney fees related to his response to Broadmoor's objections to the magistrate's decision. In a separate order dated June 6, 2016, the trial court ordered a hearing before a magistrate to determine the appropriate amount of attorney fees awarded in its June 3, 2016 decision and entry.

(additional information about further proceedings in the Trial Court are not included)

So Broadmoor got a judgment against Dallin for $63,604.84 in 2009. As of January 4, 2017, Dallin still has not paid the judgment and Broadmoor is still trying to collect. Not only has Broadmoor not yet received any of the money Dallin owes it - the Magistrate ordered Broadmoor to pay over $4,130.00 in attorney fees to Dallin! Needless to say, Broadmoor must be very frustrated. It does not seem just.

First, the Court of Appeals affirmed the Trial Court's determination that Broadmoor's failure to substantially comply with the notice requirements for garnishment of property other than personal earnings rendered the proceedings void. Second, the Court declined to rule on Broadmoor's other assignments of error, finding that there was no final appealable order. This is because the Trial Court had ruled that Dallin was entitled to additional attorney fees, but had left the amount to be determined at a subsequent hearing. The Court noted that "a request for attorney fees filed in response to objections to a magistrate's decision in a garnishment proceeding is intertwined with the merits of the action and is a 'claim' within the meaning of Civ.R. 54(B)." Accordingly, the Court determined that "the trial court disposed of fewer than all of the claims for relief by reserving the issue of the amount of attorney fees for a later hearing and did not include Civ.R. 54(B) language." 

Now, Broadmoor has to go back to the Trial Court, endure another hearing on additional attorney fees to be awarded, and then, essentially, redo the appeal. Ironically, Dallin (it appears) did not incur any attorney fees when the underlying lawsuit was brought, as the judgment was a default judgment, and even now, Dallin is paying attorney fees but the Trial Court keeps ordering Broadmoor to pay his attorney fees. 

Attorneys often talk to their clients about how hard it can be to collect when counseling in favor of accepting a settlement. While having attorney fees assessed in this situation is highly atypical in my experience, this case is as good an example as any to illustrate that point. From here, presumably the saga will continue and Broadmoor may well be able to collect. Perhaps the parties will settle.

 

Alex Durst is a Cincinnati civil litigation attorney and appellate attorney with The Durst Law Firm. Licensed in Ohio, Alex has also practiced in Missouri, Florida, Indiana, California, Nevada, Massachusetts, and Kentucky. Alex can be reached at (513) 621-2500 or alex@durstlawfirm.com.