[Cite as HSBC Bank USA, Natl. Assn. v. Bailey, 2014-Ohio-246.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT 

TRUMBULL COUNTY, OHIO 

HSBC BANK USA, NATIONAL : O P I N I O N 

ASSOCIATION, AS TRUSTEE FOR 

HOME EQUITY LOAN TRUST SERIES :

ACE2004-HE3, CASE NO. 2012-T-0086

:

 Plaintiff-Appellee, 

:

 - vs - 

:

BARBARA BAILEY, et al., 

:

 Defendants, 

:

VICTORIA GUNTHER, 

:

 Defendant-Appellant. 

 :

Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2007 CV 

00905. 

Judgment: Affirmed. 

Scott A. King, Thompson Hine, LLP, Austin Landing 1, 10050 Innovation Drive, Suite 

400, Dayton, OH 45342 and Anita L. Maddix, Cynthia M. Fischer and Elizabeth A. 

Carullo, Lerner, Sampson & Rothfuss, L.P.A., 120 East Fourth Street, Suite 800, P.O. 

Box 5480, Cincinnati, OH 45201 (For Plaintiff-Appellee). 

Grace M. Doberdruk and Daniel M. Solar, Doberdruk & Harshman Law Office, 4600 

Prospect Avenue, Cleveland, OH 44103 (For Defendant-Appellant, Victoria Gunther). 

DIANE V. GRENDELL, J. 
2 

{¶1} Defendant-appellant, Victoria Gunther, appeals the judgment of the 

Trumbull County Court of Common Pleas, denying her 60(B) Motion for Relief from 

Judgment and Supplemental Motion to Vacate or Alternative Judgment [sic], seeking 

relief from an Agreed Entry Granting Judgment and Decree in Foreclosure. The issue 

before this court is whether a party is entitled to relief from a judgment of foreclosure, 

where the motion for relief was not timely filed and was based on facts known to the 

party prior to the entry of the judgment of foreclosure. For the following reasons, we 

affirm the decision of the court below. 

{¶2} On April 5, 2007, plaintiff-appellee, HSBC Bank USA, National 

Association, filed a Complaint in Foreclosure against Barbara Bailey (mortgagor), 

Victoria Gunther (titleholder of the subject property), the Trumbull County Treasurer, 

and various John Doe defendants. 

{¶3} According to an affidavit submitted by Gunther, Barbara Bailey died on 

July 20, 2009. 

{¶4} On July 28, 2009, an Agreed Entry Granting Judgment and Decree in 

Foreclosure was issued by the trial court. 

{¶5} On November 19, 2009, Gunther filed a Motion to Vacate Foreclosure 

Sale. 

{¶6} On July 27, 2010, the trial court denied Gunther’s Motion. 

{¶7} On January 20, 2011, Gunther filed a 60(B) Motion for Relief from 

Judgment. 

{¶8} On February 7, 2011, Gunther filed a Supplemental Motion to Vacate or 

Alternative Judgment. 
3 

{¶9} On September 19, 2012, the trial court denied Gunther’s Motion for Relief 

from Judgment. 

{¶10} On October 18, 2012, Gunther filed a Notice of Appeal. On appeal, 

Gunther raises the following assignment of error: 

{¶11} “[1.] The trial court erred by denying appellant’s motion to vacate when 

appellee lacked standing to obtain judgment.” 

{¶12} “To prevail on a motion brought under Civ.R. 60(B), the movant must 

demonstrate that: (1) the party has a meritorious defense or claim to present if relief is 

granted; (2) the party is entitled to relief under one of the grounds stated in Civ.R. 

60(B)(1) through (5); and (3) the motion is made within a reasonable time, and, where 

the grounds of relief are Civ.R. 60(B)(1), (2) or (3), not more than one year after the 

judgment, order or proceeding was entered or taken.” GTE Automatic Elec., Inc. v. 

ARC Industries, Inc., 47 Ohio St.2d 146, 351 N.E.2d 113 (1976), paragraph two of the 

syllabus. 

{¶13} Gunther argues that she “has a meritorious defense to foreclosure 

because Appellee HSBC did not have an interest in the note or her mortgage at the time 

of filing the complaint and had no legal right to foreclose.” Appellant’s brief at 5. 

{¶14} Gunther’s argument is barred by the doctrine of res judicata. Under the 

doctrine of res judicata, “[a] valid, final judgment rendered upon the merits bars all 

subsequent actions based upon any claim arising out of the transaction or occurrence 

that was the subject matter of the previous action.” Grava v. Parkman Twp., 73 Ohio 

St.3d 379, 653 N.E.2d 226 (1995), syllabus. “It has long been the law of Ohio that ‘an 

existing final judgment or decree between the parties to litigation is conclusive as to all 
4 

claims which were or might have been litigated in a first lawsuit.’” (Citation omitted.) 

(Emphasis deleted.) Natl. Amusements, Inc. v. Springdale, 53 Ohio St.3d 60, 62, 558 

N.E.2d 1178 (1990). The doctrine of res judicata applies to motions made pursuant to 

Civil Rule 60(B). Coulson v. Coulson, 5 Ohio St.3d 12, 17, 448 N.E.2d 809 (1983). 

{¶15} In the present case, HSBC Bank pled in its complaint that it was “the 

holder and owner of a note,” and the “holder of a mortgage.” In her Answer, Gunther 

disputed whether HSBC Bank was “the true and lawful owner/holder of the Promissory 

Note * * * and Mortgage Deed,” raising the claim that it “lack[ed] standing to maintain 

this action in foreclosure.” In response, HSBC Bank submitted evidence that it was 

assigned the mortgage and promissory note on July 2, 2007, and that the assignment 

was recorded with the Trumbull County Recorder on July 9, 2007. 

{¶16} In the subsequent Agreed Entry Granting Foreclosure, the trial court found 

that HSBC Bank was the holder of the note secured by the mortgage and ordered 

Gunther’s equity of redemption foreclosed and the subject property sold at sheriff’s sale. 

The July 28, 2009 Agreed Entry constituted a valid, final judgment on the merits of the 

foreclosure. Gunther did not appeal this Entry. Under the doctrine of res judicata, she 

is barred from raising the issue of HSBC Bank’s standing, as that claim has been raised 

and settled. A Civil Rule 60(B) motion “may not be used as a substitute for a timely 

appeal or to accommodate a party by extending the normal period for appeal.” Steadley 

v. Montanya, 67 Ohio St.2d 297, 299, 423 N.E.2d 851 (1981); Doe v. Trumbull Cty. 

Children Servs. Bd., 28 Ohio St.3d 128, 502 N.E.2d 605 (1986), paragraph two of the 

syllabus; Wells Fargo Bank NA v. Arlington, 5th Dist. Delaware No. 13CAE30016, 2013-
5 

Ohio-4659, ¶ 41 (“Arlington’s time to appeal the issue of standing was through direct 

appeal of the decree in foreclosure”). 

{¶17} We note that the Ohio Supreme Court has certified a conflict on the 

following question: “When a defendant fails to appeal from a trial court’s judgment in a 

foreclosure action, can a lack of standing be raised as part of a motion for relief from 

judgment?” Bank of Am., N.A. v. Kuchta, 135 Ohio St.3d 1430, 2013-Ohio-1857, 986 

N.E.2d 1020. Oral argument in Kuchta occurred on January 8, 2014. 

{¶18} Assuming, arguendo, the Ohio Supreme Court were to answer the 

certified question in the affirmative, the denial of Gunther’s Motion for Relief must still be 

affirmed. 

{¶19} As noted above, a Civil Rule 60(B) motion must be brought within a 

reasonable time and/or within one year of the judgment sought to be vacated. In the 

present case, the issue of HSBC Bank’s standing was litigated during the course of the 

underlying foreclosure, during which the details of the assignment of the note and 

mortgage to HSBC Bank became known. Gunther’s Motion for Relief was filed on 

January 20, 2011, over a year after the July 28, 2009 Agreed Entry. Accordingly, the 

Motion was not timely filed. 

{¶20} Gunther counters that HSBC Bank’s lack of standing at the time the 

Complaint was filed renders the Agreed Entry void ab initio, and, therefore, “this court 

has inherent authority to vacate the judgment regardless of whether the requirements 

under Civil Rule 60(B) are satisfied.” Appellant’s brief at 14. Gunther’s argument rests 

on the supposition that a party’s lack of standing is the equivalent of a trial court lacking 
6 

subject matter jurisdiction. See Patton v. Diemer, 35 Ohio St.3d 68, 518 N.E.2d 941 

(1988), paragraph three of the syllabus. 

{¶21} Contrary to Gunther’s position, a party’s lack of standing at the time a 

complaint is filed does not equate with the trial court’s lack of subject matter jurisdiction. 

{¶22} The Ohio Supreme Court has recognized “a distinction between a court 

that lacks subject-matter jurisdiction over a case and a court that improperly exercises 

that subject-matter jurisdiction once conferred upon it.” Pratts v. Hurley, 102 Ohio St.3d 

81, 2004-Ohio-1980, 806 N.E.2d 992, ¶ 10. 

{¶23} “Jurisdiction” means “the courts’ statutory or constitutional power to 

adjudicate the case.” (Emphasis omitted.) Steel Co. v. Citizens for 

a Better Environment (1998), 523 U.S. 83, 89, 118 S.Ct. 1003, 140 

L.Ed.2d 210; Morrison v. Steiner (1972), 32 Ohio St.2d 86, 87, 61 

O.O.2d 335, 290 N.E.2d 841, paragraph one of the syllabus. The 

term encompasses jurisdiction over the subject matter and over the 

person. State v. Parker, 95 Ohio St.3d 524, 2002-Ohio-2833, 769 

N.E.2d 846, ¶22 (Cook, J., dissenting). Because subject-matter 

jurisdiction goes to the power of the court to adjudicate the merits of 

a case, it can never be waived and may be challenged at any time. 

United States v. Cotton (2002), 535 U.S. 625, 630, 122 S.Ct. 1781, 

152 L.Ed.2d 860; State ex rel. Tubbs Jones v. Suster (1998), 84 

Ohio St.3d 70, 75, 701 N.E.2d 1002. * * * 

{¶24} The term “jurisdiction” is also used when referring to a court’s 

exercise of its jurisdiction over a particular case. See State v. 
7 

Parker, 95 Ohio St.3d 524, 2002-Ohio-2833, 769 N.E.2d 846, ¶20 

(Cook, J., dissenting); State v. Swiger (1998), 125 Ohio App.3d 

456, 462, 708 N.E.2d 1033. “‘The third category of jurisdiction [i.e., 

jurisdiction over the particular case] encompasses the trial court’s 

authority to determine a specific case within that class of cases that 

is within its subject matter jurisdiction. It is only when the trial court 

lacks subject matter jurisdiction that its judgment is void; lack of 

jurisdiction over the particular case merely renders the judgment 

voidable.’” Parker at ¶22 (Cook, J., dissenting), quoting Swiger, 

125 Ohio App.3d at 462, 708 N.E.2d 1033. “Once a tribunal has 

jurisdiction over both the subject matter of an action and the parties 

to it, ‘* * * the right to hear and determine is perfect; and the 

decision of every question thereafter arising is but the exercise of 

the jurisdiction thus conferred * * *.’” State ex rel. Pizza v. Rayford 

(1992), 62 Ohio St.3d 382, 384, 582 N.E.2d 992, quoting Sheldon’s 

Lessee v. Newton (1854), 3 Ohio St. 494, 499. 

Id. at ¶ 11-12. 

{¶25} In Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 

2012-Ohio-5017, 979 N.E.2d 1214, the Ohio Supreme Court held that “standing to sue 

is required to invoke the jurisdiction of the common pleas court,” id. at ¶ 24, but it did not 

state that the common pleas court lacked subject-matter jurisdiction where a party 

lacked standing to sue. The fact that HSBC Bank improperly invoked that jurisdiction by 

lacking the requisite standing to initiate the foreclosure action, i.e., it was not assigned 
8 

the note and mortgage prior to the filing of the complaint, merely rendered the lower 

court’s judgment voidable, not void ab initio. State v. Filiaggi, 86 Ohio St.3d 230, 240, 

714 N.E.2d 867 (1999) (“[w]here it is apparent from the allegations that the matter 

alleged is within the class of cases in which a particular court has been empowered to 

act, jurisdiction is present[;] [a]ny subsequent error in the proceedings is only error in 

the ‘exercise of jurisdiction,’ as distinguished from the want of jurisdiction in the first 

instance”) (citation omitted). 

{¶26} The Tenth District Court of Appeals has explained the distinction by 

analyzing a party’s lack of standing to initiate a lawsuit in the context of a case’s 

justiciability: 

{¶27} [A] court may have jurisdiction over the subject-matter of a case 

and yet not be empowered to adjudicate it to final judgment for 

reasons particular to that case, including the lack of standing of the 

plaintiff. Where an action is brought by a plaintiff who lacks 

standing, the action is not justiciable because it fails to present a 

case or controversy between the parties before it. * * * But the 

court’s lack of “jurisdiction,” i.e., its ability to properly resolve a 

particular action due to the lack of a real case or controversy 

between the parties, does not mean that the court lacked subjectmatter jurisdiction over the case. 

Deutsche Bank Natl. Trust Co. v. Finney, 10th Dist. Franklin Nos. 13AP-198 and 13AP373, 2013-Ohio-4884, ¶ 24. 
9 

{¶28} On the issue of raising a challenge to a party’s standing, the court in 

Schwartzwald stated that “the issue of standing, inasmuch as it is jurisdictional in 

nature, may be raised at any time during the pendency of the proceedings.” (Citation 

omitted.) Schwartzwald at ¶ 22. The key words are “during the pendency of the 

proceedings.” The Supreme Court has emphasized that, after a judgment entry grants 

a decree of foreclosure and order of sale, the case is no longer pending. Countrywide 

Home Loans Servicing, L.P. v. Nichpor, 136 Ohio St.3d 55, 2013-Ohio-2083, 990 

N.E.2d 565, syllabus. Once the decree of foreclosure becomes final, all that remains in 

the case are “administrative matters finalizing the result of the sheriff’s sale and giving 

the mortgagors the opportunity to exercise their equitable right of redemption[,] * * * 

actions * * * classified as proceedings to aid in execution of the judgment.” Id. at ¶ 6. 

{¶29} Gunther cites to this court’s decision in Fed. Home Loan Mtge. Corp. v. 

Rufo, 11th Dist. Ashtabula No. 2012-A-0011, 2012-Ohio-5930, 983 N.E.2d 406, in 

support of her position. This court, however, subsequently overruled Rufo with respect 

to the jurisdictional issue. CitiMortgage, Inc. v. Oates, 11th Dist. Trumbull No. 2013-T0011, 2013-Ohio-5077, ¶ 19 (“it was incorrect to equate standing with subject matter 

jurisdiction”). This court now acknowledges that “the sole similarity of standing and 

subject matter jurisdiction is that the initial challenge to each requirement can be made 

at any time while the underlying case is pending.” Id.

{¶30} In the present matter, the underlying case is no longer pending. In order 

to challenge the final judgment, it was necessary for Gunther to satisfy the timeliness 

requirements of Civil Rule 60(B). 

{¶31} The sole assignment of error is without merit. 
10 

{¶32} For the foregoing reasons, the judgment of the Trumbull County Court of 

Common Pleas, denying Gunther’s Motion for Relief, is affirmed. Costs to be taxed 

against appellant. 

TIMOTHY P. CANNON, P.J., concurs, 

COLLEEN MARY O’TOOLE, J., dissents with a Dissenting Opinion. 

________________________________ 

COLLEEN MARY O’TOOLE, J., dissents with a Dissenting Opinion. 

{¶33} Because I believe the trial court’s judgment should be reversed and 

remanded, I respectfully dissent. 

{¶34} In her sole assignment of error, appellant argues that the trial court erred 

in denying her motion because HSBC lacked standing to obtain judgment. 

{¶35} HSBC asserts that the trial court did not err because appellant’s 

supplemental motion is barred by res judicata, was an improper substitute for an 

appeal, was untimely, and there was no “newly discovered evidence” to support a 

Civ.R. 60(B)(2) motion. In addition, HSBC submitted two cases as supplemental 

authority that it relied on during oral arguments, finding that courts had subject matter 

jurisdiction to hear and decide original matters: Dwyer v. Thompson Twp. Volunteer Fire 

Dept., 11th Dist. Geauga No. 1397, 1988 Ohio App. LEXIS 3643 (Sept. 9, 1988); and 

Mantho v. Bd. of Liquor Control, 162 Ohio St. 37 (1954). 
11 

{¶36} This writer notes, however, that neither supplemental case cited by HSBC 

involved a mortgage foreclosure action, which is the subject of the instant matter. 

Dwyer, a case from 1988, involved a position dismissal regarding a township volunteer 

fire department and a board of trustees. Mantho, a case from 1954, involved the 

issuance or renewal of liquor permits regarding the Board of Liquor Control. 

{¶37} For the reasons that follow, this court should follow the Ohio Supreme 

Court’s decision in Fed. Home Loan Mortg. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 

2012-Ohio-5017, involving a mortgage foreclosure action, and I agree with appellant 

that HSBC lacked standing to obtain judgment. 

{¶38} I agree with this court’s position in Fed. Home Loan Mtge. Corp. v. Rufo, 

11th Dist. Ashtabula No. 2012-A-0011, 2012-Ohio-5930, ¶15-21, holding: 

{¶39} “‘Subject matter jurisdiction is a court’s power to hear and decide a case 

on the merits.’ Morrison v. Steiner, 32 Ohio St.2d 86 * * * (1972), paragraph one of the 

syllabus. ‘Because subject-matter jurisdiction goes to the power of the court to 

adjudicate the merits of a case, it can never be waived and may be challenged at any 

time.’ Pratts v. Hurley, 102 Ohio St.3d 81, 2004-Ohio-1980, ¶11 * * *. When the trial 

court lacks subject matter jurisdiction, its final judgment is void. Id. at ¶12. 

{¶40} “In Ohio, courts of common pleas have subject matter jurisdiction over 

justiciable matters. Ohio Constitution, Article IV, Section 4(B). 

{¶41} “* * * 

{¶42} “In the context of a mortgage foreclosure action, the mortgage holder must 

establish an interest in the mortgage or promissory note in order to have standing to 

invoke the jurisdiction of the common pleas court. * * * Schwartzwald, [supra], ¶28 * * *. 
12 

{¶43} “Whether standing exists is a matter of law that is reviewed de novo. 

Cuyahoga Cty. Bd. of Commrs. v. State, 112 Ohio St.3d 59, 2006-Ohio-6499, ¶23 * * *. 

{¶44} “Standing is similar to the requirement in Civ.R. 17(A) that every action 

‘shall be prosecuted in the name of the real party in interest.’ The real party in interest 

is one who has a real interest in the subject matter of the litigation, and not merely an 

interest in the action itself, i.e., ‘“one who is directly benefitted or injured by the outcome 

of the case.”’ Midwest Business Capital v. RFS Pyramid Management, LLC, 11th Dist. 

No. 2011-T-0030, 2011-Ohio-6214, ¶19, quoting Shealy v. Campbell, 20 Ohio St.3d 23, 

24 * * * (1985). * * * 

{¶45} “In contrast to standing, which is jurisdictional, Civ.R. 17(A) is considered 

procedural and is waived if not specifically pled. Travelers Indemn. Co. v. R.L. Smith 

Co., 11th Dist. No. 2000-L-014, 2001 Ohio App. LEXIS 1750, *8 (Apr. 13, 2001).” 

(Emphasis sic.) (Parallel citations omitted.) 

{¶46} In this case, the issue before us is whether HSBC was required to have 

standing at the time it filed this action or whether its lack of standing was cured pursuant 

to Civ.R. 17(A) by the assignment of the note and mortgage after the action was filed 

but before final judgment was entered. 

{¶47} As stated, the Ohio Supreme Court addressed the identical issue before 

us in Schwartzwald, supra. In that case, the Court held that standing is required to 

present a justiciable controversy and is a jurisdictional requirement. Id. at ¶21-22. The 

Court held that since standing is required to invoke the trial court’s jurisdiction, standing 

is determined as of the filing of the complaint. Id. at ¶24. The Court also held that a 

mortgage holder cannot rely on events occurring after the complaint is filed to establish 
13 

standing. Id. at ¶26. Thus, the plaintiff cannot rely on Civ.R. 17(A) to cure its lack of 

standing by obtaining an interest in the subject of the litigation after the action is filed 

and substituting itself as the real party in interest. Id. at ¶36. The Court further held that 

when the evidence demonstrates the mortgage lender lacked standing when the 

foreclosure action was filed, the action must be dismissed without prejudice. Id. at ¶40. 

(Emphasis added.) 

{¶48} Therefore, pursuant to Schwartzwald, standing is jurisdictional. As a 

result, HSBC was required to have an interest in the note or mortgage when it filed this 

action in order to have standing to invoke the trial court’s jurisdiction. Because HSBC 

failed to establish that it held the note or mortgage before filing the complaint, it did not 

have standing to bring this foreclosure action. Accordingly, the trial court erred in 

denying appellant’s “Supplemental Motion to Vacate or Alternative Judgment,” as a 

motion to vacate a void judgment need not comply with the requirements of Civ.R. 

60(B). See Falk v. Wachs, 116 Ohio App.3d 716, 721 (9th Dist.1996). This writer 

would order the trial court to dismiss the complaint without prejudice. 

{¶49} For the foregoing reasons, I believe appellant’s sole assignment of error is 

well-taken. Thus, I would reverse the trial court’s judgment and remand the matter for 

further proceedings. I dissent.