COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 70792 BLUE CROSS & BLUE SHIELD : OF OHIO : : : JOURNAL ENTRY Plaintiff-Appellee : : AND vs. : : OPINION WALTER WITWER : : : : Defendant-Appellant : : DATE OF ANNOUNCEMENT OF DECISION: MARCH 6, 1997 CHARACTER OF PROCEEDING: Civil appeal from Cleveland Municipal Court Case No. 95-CVF-5631 JUDGMENT: JUDGMENT VACATED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellee: JOHN D. ZOLLER MARY BIACSI SCHOLL 1040 The Leader Building 526 Superior Avenue Cleveland, Ohio 44114-1402 For Defendant-Appellant: ANNE L. KILBANE JOHN SCHLOSS 1370 Ontario Street, First Floor Cleveland, Ohio 44113-1792 - 2 - O'DONNELL, J.: Walter Witwer, a resident of the city of Brooklyn, appeals a $6,920.24 default judgment of the Cleveland Municipal Court entered in favor of Blue Cross and Blue Shield of Ohio on its claim for reimbursement of its subrogated medical payments. In accordance with its policy of medical insurance, Blue Cross paid $6,920.24 in various medical charges incurred by Witwer as a result of his involvement in a motor vehicle accident which occurred on September 17, 1991. Thereafter, on March 22, 1995, Blue Cross sued Witwer in the Cleveland Municipal Court and served him by certified mail at his home in Brooklyn, Ohio, a suburb of Cleveland, asserting its right as assignee and subrogee to any amounts received or recovered from any responsible third party up to the amount of its subrogated medical payment. Witwer filed an untimely answer and counterclaim to the complaint, but the court after hearing, found that Witwer had recovered a sum of money and failed to reimburse Blue Cross, thereby breaching his medical insurance contract and, accordingly, the court entered a $6,920.24 default judgment against him. Thereafter, Witwer appealed that judgment to our court, but we dismissed the appeal for lack of a final appealable order in accordance with Civ.R. 54(B). On May 10, 1996, Blue Cross dismissed count two of its complaint, thereby rendering the default judgment final and appealable. - 3 - On May 13, 1996, Blue Cross filed a garnishment on Witwer's property in an effort to collect its judgment. Witwer then tendered a $6.920.24 check in payment of the judgment and Blue Cross thereafter satisfied the judgment. Then, on June 6, 1996, Witwer filed his second notice of appeal in this case and has raised one assignment of error for our review: I. THE CLEVELAND MUNICIPAL COURT ERRED BY RENDERING A DEFAULT JUDGMENT AGAINST THE DEFENDANT-APPELLANT WHERE IT HAD NO JURISDICTION OVER THE DEFENDANT- APPELLANT OR THE SUBJECT MATTER OF THE UNDERLYING SUIT. Witwer contends that the Cleveland Municipal Court lacked jurisdiction in this case because at all relevant times he resided in Brooklyn, Ohio; the subject matter of the controversy did not arise there; and Blue Cross did not serve him either Cleveland or Bratenahl. Blue Cross asserts that the Cleveland Municipal Court did have jurisdiction to consider this action in that the failure of Witwer's counsel, whose offices are located in Cleveland, to pay the subrogated medical expenses to Blue Cross constituted a breach of Witwer's subrogated medical insurance policy which occurred within the territorial boundary of the Cleveland Municipal Court. Further, Blue Cross suggests that Witwer waived venue by not objecting, and also contends that this appeal is - 4 - moot because Witwer has paid the judgment and Blue Cross has already satisfied the docket. The issue then presented for our review is whether Cleveland Municipal Court had in personam or subject matter jurisdiction over this controversy. R.C. 1901.19 refers to the jurisdictional powers of the municipal court: (A) *** a municipal court *** (has) jurisdiction within its territory in all of the following actions or proceedings ***: (Emphasis added.) *** (4) In any civil action or proceeding at law in which the subject matter of the action or proceeding is located within the territory or when the defendant or any of the defendants resides or is served with summons within the territory; (Emphasis added.) R.C. 1901.03 defines "territory" as: (A) *** the geographical areas within which municipal courts have jurisdiction as provided in sections 1901.01 and 1901.02 of the Revised Code. R.C. 1901.01 establishes a municipal court in the city of Cleveland, and R.C. 1901.02 defines territorial jurisdiction, in relevant part, as follows: (A) The municipal courts established by section 1901.01 of the Revised Code have jurisdiction within the corporate limits of their respective municipal corporations and are courts of record. *** *** (B) In addition to the jurisdiction set forth in division (A) of this section, the municipal courts established by section 1901.01 of the revised Code have jurisdiction as follows: *** - 5 - The Cleveland municipal corporation has jurisdiction within the municipal corporation of Bratenahl in Cuyahoga county. *** The record in this case establishes that the clerk of the Cleveland Municipal Court served Witwer by certified mail at the address listed on the complaint - Biddulph Road in Brooklyn, Ohio, an area outside the territorial boundary of that court. Further, the breach of contract about which appellee complains relates to a Supplemental Agreement dated September 17, 1990 between General Motors Corporation and the U.A.W. covering health care which appellee maintains Witwer's counsel breached within the city of Cleveland by not forwarding money pursuant to such contract. These facts alone do not vest the Cleveland Municipal Court with jurisdiction over Witwer or the subject matter of the controversy. Hence, we conclude the court lacked both subject matter and in personam jurisdiction to hear this case because the court did not acquire jurisdiction over him or this controversy in accordance with R.C. 1901.19(A)(4). Appellee's argument concerning venue is misplaced and not well taken as we have concluded the court did lack jurisdiction to hear the controversy. Finally, we address the argument regarding mootness raised by Witwer's payment of the judgment and subsequent satisfaction of the docket by Blue Cross. In Lynch v. Lakewood City School Dist. Bd. of Edn. (1927), 116 Ohio St. 361, the court stated in its syllabus: - 6 - Where the court rendering judgment has jurisdiction of the subject-matter of the action and of the parties, and fraud has not intervened, and the judgment is voluntarily paid and satisfied, such payment puts an end to the controversy, and takes away from the defendant the right to appeal or prosecute error or even to move for vacation of judgment. (Emphasis added.) The language in Lynch, supra, presupposes proper jurisdiction before it concludes the consequent finality of the controversy. These conditions precedent are not present in the instant matter since we have concluded the court lacked both subject matter and personal jurisdiction in this case. We further note that in Patton v. Diemer (1988), 35 Ohio St.3d 68, the court held in paragraph three of its syllabus: 3. A judgment rendered by a court lacking subject matter jurisdiction is void ab initio. We conclude only that the issue of payment did not foreclose Witwer's right to challenge the judgment on the basis of lack of jurisdiction. Here, because the court lacked subject matter and in personam jurisdiction in this case, the judgment rendered against Witwer was void ab initio. Appellant's assignment of error is well taken and sustained. The judgment of the Cleveland Municipal Court is vacated. Judgment vacated. - 7 - It is ordered that appellant(s) recover of appellee(s) costs herein taxed. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. MATIA, P.J., and DYKE, J., CONCUR JUDGE TERRENCE O'DONNELL N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement .