[Cite as Cuyahoga Cty. Treasurer v. Unknown Heirs of Russell, 2023-Ohio-1976.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT

COUNTY OF CUYAHOGA

TREASURER OF

CUYAHOGA COUNTY, OHIO, :

Plaintiff-Appellee, :

No. 112099

v. :

UNKNOWN HEIRS OF 

WILLIAM W. RUSSELL, JR., ET AL., :

Defendants-Appellants. :

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED

RELEASED AND JOURNALIZED: June 15, 2023

Civil Appeal from the Cuyahoga County Court of Common Pleas

Case No. CV-19-921584

Appearances:

Michael C. O’Malley, Cuyahoga County Prosecuting 

Attorney, and Edmund G. Tallos, Assistant Prosecuting 

Attorney — Tax Foreclosure, for appellee. 

Carlisle, McNellie, Rini, Kramer & Ulrich, Co., LPA, and 

Eric T. Deighton, for appellants. 

EILEEN T. GALLAGHER, J.:

Defendants-appellants, Deutsche Bank National Trust Company 

(“Deutsche Bank”), appeals from the trial court’s judgment denying its motion for 
distribution of excess sale proceeds of a tax-foreclosure sale. Deutsche Bank raises 

the following assignment of error for review:

The trial court abused its discretion in denying appellant’s motion for 

distribution of excess sale proceeds on deposit, where no other party 

has made application for those proceeds in the two years they have 

been on deposit.

After careful review of the record and relevant case law, we affirm the 

trial court’s judgment.

I. Procedural and Factual History

On September 17, 2019, plaintiff-appellee, the Treasurer of Cuyahoga 

County, Ohio (“Treasurer”), filed a real estate tax foreclosure complaint against 

William W. Russell, Jr.1 seeking to foreclose a property located at 3105 W. 100th 

Street, Cleveland (“the property”) due to a failure to pay the real-estate taxes for 

several years. The complaint also named as defendants Susan L. Bon, Morgan W. 

Russell, Chase W. Russell, unknown heirs of William W. Russell, Jr., as well as the 

mortgage holder of the property, Deutsche Bank, as Trustee for Argent Securities 

Inc., Asset-Backed Pass-Through Certificates, Series 2005-W3. The complaint 

requested that the defendants “be required to set up their liens or claims or be 

forever barred” from asserting any claims against the property.

Service was made on all named defendants. None of the defendants, 

including Deutsche Bank, answered or otherwise appeared in the foreclosure action. 

Following a hearing held on February 20, 2020, the magistrate issued a decision 

1 A certificate of death for William W. Russell, Jr. attached to the complaint 

identifies a date of death of March 31, 2014, for William W. Russell, Jr.
awarding the Treasurer with a decree of foreclosure. The magistrate reiterated in its 

decision that all necessary parties had been duly served with the summons and 

complaint.

On March 17, 2020, the trial court adopted the magistrate’s decision, 

issuing a decree of foreclosure and ordering that, upon the filing of the entry of 

confirmation of sale, the title to the parcel shall be free and clear of all liens and 

encumbrances.

On December 4, 2020, the trial court issued an order for the property 

to be sold at a sheriff’s sale. On January 6, 2021, the property was sold for $47,100.

On January 29, 2021, the trial court confirmed the sale. After a 

deduction of taxes ($15,711.40) and costs involved in the sale, there was $28,876.99 

remaining in the sale proceeds, held by the clerk of courts pending further order of 

the trial court. In relevant part, the confirmation of sale contained the following 

language:

It is further ORDERED, ADJUDGED AND DECREED that the equity 

of redemption is extinguished and that any parties defendant owning 

or claiming any right, title, or interest in, or lien upon said parcel, 

together with such who may have right of dower, shall be and they are 

hereby forever barred from asserting any right, title or interest in, or 

lien upon the said parcel.

On April 22, 2021, Real Time Resolutions, Inc. (“Real Time”) became 

successor in interest to Deutsche Bank by virtue of a “Corporate Assignment of 

Mortgage.” On May 6, 2021, Real Time filed a “Motion to Intervene and For 
Distribution of Excess Sale Proceeds on Deposit,” arguing that it was permitted to 

intervene pursuant to Civ.R. 24(A)(2) and 24(B)(2) as the assignee of the mortgage. 

On May 25, 2021, the trial court denied Real Time’s motion, stating:

Real Time’s motion to intervene and for distribution of excess sale 

proceeds on deposit * * * is denied. Said party’s predecessor in interest, 

defendant Deutsche Bank, was properly named and served and was 

required to answer and set up any claim that it may have to the [subject] 

property or be barred. Said party failed to do so and the court found it 

to be in default and ruled against it along with all other non-answering 

parties. The Ohio Supreme Court has held that a lienholder that is 

named as a defendant in a foreclosure action, but fails to answer, is 

barred from raising its interest thereafter as long as the plaintiff alleged 

that the defendant claims some interest in the party and advises the 

defendant that its claims will be barred if the defendant fails to appear 

and disclose it. * * * Therefore, defendant Deutsche Bank and its 

successors, Real Time, are barred from sheriff sale proceeds.

Real Time appealed the trial court’s decision, arguing the trial court 

abused its discretion in denying its motion to intervene and for distribution of excess 

sale proceeds on deposit without a hearing. Real Time maintained that it was 

entitled to intervene in this tax-foreclosure case as a matter of right pursuant to 

Civ.R. 24(A)(2). 

On February 3, 2022, this court affirmed the trial court’s judgment,

finding the trial court did not abuse its discretion in denying Real Time’s motion to 

intervene and for distribution of excess sale proceeds on deposit. Treasurer of 

Cuyahoga Cty. v. Unknown Heirs of William W. Russell, Jr., 8th Dist. Cuyahoga 

No. 110540, 2022-Ohio-309 (“Russell I”). 

Following this court’s decision in Russell I, Real Time reassigned the 

subject mortgage to Deutsche Bank on May 19, 2022. On October 14, 2022, 
Deutsche Bank filed a motion for distribution of excess funds. Deutsche Bank 

argued that as holder of the subject note and mortgage, it would suffer irreparable 

harm if the trial court “denied Deutsche Bank its opportunity to have its debt paid 

from the excess sheriff’s sale proceeds being held by the court.” The motion was 

supported by the affidavit of David Rosas (“Rosas”), the director of loss mitigation 

for Real Time. In pertinent part, Rosas incorporated copies of the subject note and 

mortgage and averred that Deutsche Bank was owed a principal balance in the 

amount of $95,868.24, plus interest, late charges, and all sums advanced for the 

payment of real-estate taxes, assessments, insurance premiums, and property 

protection.

The trial court denied the motion on November 2, 2022. Consistent 

with its prior judgment, the trial court stated, in relevant part: 

Defendant # 3 Deutsche Bank’s motion for distribution of excess sale 

proceeds on deposit * * * is denied. Said party was properly named and 

served and was required to answer and set up any claim that it may 

have to the [subject] property or be barred. Said party failed to do so 

and the court found it to be in default. The Ohio Supreme Court has 

held that a lienholder that is named as a defendant in a foreclosure 

action, but fails to answer, is barred from raising its interest thereafter 

as long as the plaintiff alleged that the defendant claims some interest 

in the property and advises the defendant that its claims will be barred 

if the defendant fails to appear and disclose it. * * * Therefore, 

defendant #3 Deutsche Bank is barred from sheriff sale proceeds.

Deutsche Bank now appeals from the trial court’s judgment.

II. Law and Analysis

In the sole assignment of error, Deutsche Bank argues the trial court 

abused its discretion by denying its motion for distribution of excess sale proceeds. 
Deutsche Bank contends “the trial court should have exercised its equitable powers 

to see that Deutsche Bank was not denied its opportunity to have its debt paid from 

the excess proceeds of the sheriff’s sale.” 

As commonly used, the word “mortgage” encompasses two separate 

instruments: a promissory note and a security instrument. Bank of N.Y. Mellon v. 

Primes, 8th Dist. Cuyahoga No. 105678, 2018-Ohio-1833, ¶ 9. The security 

instrument makes the real property the collateral securing performance on the note. 

Id. A creditor seeking to enforce a mortgage agreement has several remedies 

available. “Upon breach of condition of the mortgage agreement, a mortgagee has 

concurrent remedies. It may, at its option, sue in equity to foreclose, or sue at law 

directly on the note; or, bring an action in ejectment.” The Broadview S. &. L. Co. 

v. Crow, 8th Dist. Cuyahoga Nos. 44690, 44691, and 45002, 1982 Ohio App. LEXIS 

12139, 7 (Dec. 30, 1982). Relevant to this appeal, “‘[a]n action at law on a promissory 

note to collect a mortgage debt is separate and distinct from an action in equity to 

enforce the mortgage lien on the property.’” United States Bank Natl. Assn. v. 

Franko, 2018-Ohio-687, 107 N.E.3d 142, ¶ 16 (8th Dist.), quoting Deutsche Bank 

Natl. Trust Co. v. Holden, 147 Ohio St.3d 85, 2016-Ohio-4603, 60 N.E.3d 1243, ¶ 35.

In this case, there is no dispute that Deutsche Bank failed to answer or 

otherwise assert an interest in the subject property during the underlying

foreclosure action. It is also undisputed that the confirmation of sale entered by the 

trial court on January 29, 2021, extinguished Deutsche Bank’s interest in the subject 

real property. Nevertheless, Deutsche Bank argues that because it has provided 
uncontradicted evidence to establish the amount due on the note, and because there 

are no other parties asserting an interest in the excess funds, the trial court abused 

its discretion in denying its motion without considering the equitable aspects of its 

request. 

Claims for equitable relief are reviewed for an abuse of discretion. 

Sandusky Properties v. Aveni, 15 Ohio St.3d 273, 473 N.E.2d 798 (1984). A trial 

court abuses its discretion only if its decision is unreasonable, arbitrary, or 

unconscionable. State ex rel. DiFranco v. S. Euclid, 144 Ohio St.3d 571, 2015-Ohio4915, 45 N.E.3d 987, ¶ 13; Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450

N.E.2d 1140 (1983). “‘A decision is unreasonable if there is no sound reasoning 

process that would support that decision.’” Ockunzzi v. Smith, 8th Dist. Cuyahoga 

No. 102347, 2015-Ohio-2708, ¶ 9, quoting AAAA Ents., Inc. v. River Place 

Community Urban Redevelopment Corp., 50 Ohio St.3d 157, 161, 553 N.E.2d 597 

(1990). An abuse of discretion may also be found where the trial court “‘applies the 

wrong legal standard, misapplies the correct legal standard, or relies on clearly 

erroneous findings of fact.’” Ockunzzi at ¶ 9, quoting Thomas v. Cleveland, 176 Ohio 

App.3d 401, 2008-Ohio-1720, 892 N.E.2d 454, ¶ 15 (8th Dist.).

After careful consideration, we find no merit to Deutsche Bank’s 

position on appeal. As stated, this court previously affirmed the trial court’s denial 

of Real Time’s motion to intervene and request for excess sale proceeds because its 

predecessor in interest, Deutsche Bank, had no interest in the proceeds of the 
sheriff’s sale as the defaulting junior lienholder. This court explained its conclusion 

as follows:

The trial court was correct that Deutsche Bank’s mortgage interest in 

the property was extinguished with the confirmation of the sheriff’s 

sale. See, e.g., Deutsche Bank Natl. Trust Co. v. Richardson, 2d Dist. 

Darke Nos. 2010-CA-3 and 2010-CA-13, 2011-Ohio-1123, ¶ 21. Real 

Time was assigned Deutsche Bank’s mortgage in the property months 

after the confirmation of the sale, i.e., after Deutsche Bank’s mortgage 

interest had been extinguished, and therefore, Real Time, as its 

successor in interest, cannot claim any interest to be protected by Civ.R. 

24(A)(2) through a motion to intervene.

Real Time acknowledged in its motion to intervene that “Real Time is 

not trying to assert any interest in the real property which was the 

subject of this case; the time for doing so has long passed.” Real Time 

asserted instead that it was asserting an interest in the excess sheriff’s 

sale funds.

In this regard, this court has recently noted that “a defaulting junior 

lienholder is not entitled to share in any proceeds realized from a 

foreclosure sale because, in the absence of other indications in the 

complaint, its default can be construed as a disclaimer of interest in the 

property.” State ex rel., US Bank Trust Natl. Assn. v. Cuyahoga Cty., 

8th Dist. Cuyahoga No. 110297, 2021-Ohio-2524, ¶ 11, citing 

Zukerman, Daiker & Lear Co., L.P.A. v. Signer, 186 Ohio App.3d 686, 

2009-Ohio-968, 930 N.E.2d 336, ¶ 34 (8th Dist.), and Settlers Bank v. 

Burton, 4th Dist. Washington Nos. 12CA36 and 12CA38, 2014-Ohio335, ¶ 31. Because Deutsche Bank — the defaulting junior lienholder 

whose lien was subordinate to the tax lien — has no interest in the 

proceeds of the sheriff’s sale, Real Time, as its successor, cannot claim 

any interest in the proceeds either. Consequently, the trial court did 

not abuse its discretion in denying Real Time’s motion to intervene.

(Emphasis added.) Russell I, 8th Dist. Cuyahoga No. 110540, 2022-Ohio-309 at 

¶ 26-28. See also Lexington Ridge Homeowners Assn. v. Schlueter, 9th Dist. 

Medina No. 10CA0087-M, 2013-Ohio-1601, ¶ 20-21; Provident Bank v. Murray, 2d 

Dist. Greene No. 84-CA-25, 1984 Ohio App. LEXIS 12010 (Dec. 11, 1984); 
Winemiller v. Laughlin, 51 Ohio St. 421, 38 N.E. 111 (1894), paragraph two of the 

syllabus. 

Although the panel in Russell I declined to address Real Time’s 

equitable arguments for the first time on appeal, we find the panel’s determination 

that Deutsche Bank has no interest in the sale proceeds of the sheriff’s sale is 

relevant to issues of equity raised in the present appeal. 

On appeal, Deutsche Bank correctly states that “[a] foreclosure action 

is a civil action in equity.” Bank of Am. v. Rogers, 8th Dist. Cuyahoga No. 107464, 

2019-Ohio-1443 ¶ 14. In this case, however, the foreclosure action concluded before 

Deutsche Bank ever appeared. See Treasurer of Cuyahoga Cty. v. Unknown Heirs 

of Weisner, 2022-Ohio-2668, 194 N.E.3d 451, ¶ 15 (8th Dist.). It therefore follows 

that Deutsche Bank’s “opportunity to receive equitable relief was extinguished when 

the foreclosure proceedings concluded.” Id. at ¶ 15. In reaching this conclusion, we 

reiterate that “the equitable action in foreclosure is not synonymous with enforcing 

the legal obligation to pay the note.” Id. at ¶ 19, citing U.S. Bank Natl. Assn. v. 

Robinson, 8th Dist. Cuyahoga No. 105067, 2017-Ohio-5585, ¶ 7. Because Deutsche 

Bank’s mortgage interest had been extinguished, and the record is devoid of any 

indication that Deutsche Bank exercised its legal right to seek a timely judgment on 

the subject note, we reject Deutsche Bank’s attempt to conflate the equitable 

principles of foreclosure with the factual circumstances presented in this case. Id.

(“Even though PNC was barred from pursuing the foreclosed property or the sale 

proceeds, the trial court properly determined that PNC could still pursue an action 
at law to enforce the equity reserve agreement by obtaining a judgment and seeking 

attachment of that judgment.”). 

Relatedly, we note that while Deutsche Bank has repeatedly 

referenced the court’s “broad equitable powers” and has characterized its requested 

relief as an “equitable lien” or an attempt to receive “equitable relief,” Deutsche Bank 

has not presented any legal or factual arguments to suggest it can satisfy the 

necessary elements for an equitable lien. See Michael v. Miller, Slip Opinion No. 

2022-Ohio-4543, ¶ 26-28 (defining the elements required to establish an equitable 

lien). Its arguments are limited to the equitable principles of foreclosure. Under 

these circumstances, we decline to make arguments on behalf of Deutsche Bank or 

otherwise consider an issue that was not expressly raised before the trial court. 

App.R. 16(A)(7).

Finally, we recognize that this court has previously allowed a creditor 

who defaulted in a foreclosure proceeding to share in the proceeds of a foreclosure 

sale. Treasurer of Cuyahoga Cty. v. Berger Properties of Ohio L.L.C., 8th Dist. 

Cuyahoga No. 110233, 2021-Ohio-3204. However, in Berger, the defaulting 

creditor introduced a valid judgment against the debtor in the amount in excess of 

$7.8 million. Since the mortgagor-creditor in Berger had a valid and enforceable 

judgment against the debtor, the mortgagor-creditor possessed a legal right to 

enforce the judgment against the debtor. Thus, the creditor was allowed to share in 

the proceeds that would have otherwise been distributed to the debtor. As 

mentioned, however, Deutsche Bank has not presented any documentary evidence 
to suggest that it obtained a valid judgment on the subject note. In the absence of a 

valid judgment in favor of Deutsche Bank, we find Berger to be unpersuasive. See 

Weisner, 2022-Ohio-2668, 194 N.E.3d 451, at ¶ 22 (8th Dist.) (holding the same). 

As articulated by this court in Weisner, Deutsche Bank, through no fault of the trial 

court, “simply failed to obtain a judgment in a timely fashion and is consequently 

not entitled to the proceeds.” Id. at ¶ 22- 23. 

Based on the foregoing, we are unable to conclude that the trial court 

abused its discretion in denying Deutsche Bank’s motion for distribution of excess 

funds.

The sole assignment of error is overruled.

Judgment affirmed.

It is ordered that appellee recover from appellants costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to the common pleas court to carry 

this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 

of the Rules of Appellate Procedure.

EILEEN T. GALLAGHER, JUDGE

LISA B. FORBES, P.J., and

MARY J. BOYLE, J., CONCUR