[Cite as U.S. Bank Trust, N.A. v. Watson, 2020-Ohio-3412.]

IN THE COURT OF APPEALS OF OHIO 

THIRD APPELLATE DISTRICT 

PAULDING COUNTY 

 

U.S. BANK TRUST, N.A., AS 

TRUSTEE FOR LSF9 MASTER 

PARTICIPATION TRUST, 

 PLAINTIFF-APPELLEE, CASE NO. 11-19-09 

 v. 

PAMELA J. WATSON, AKA 

PAMELA J. LAMBERT ET AL., O P I N I O N 

 DEFENDANTS-APPELLANTS. 

 

Appeal from Paulding County Common Pleas Court 

Trial Court No. CI 16 167 

Judgment Affirmed 

Date of Decision: June 22, 2020 

 

APPEARANCES: 

 

George C. Rogers for Appellants 

 Robert C. Folland and David J. Dirisamer for Appellee 
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PRESTON, J. 

{¶1} Defendants-appellants, Pamela J. Watson, now known as Pamela J.

Lambert (“Pamela”), and William L. Lambert (“William”) (collectively the 

“Watsons”),1

 appeal the February 9, 2018 and October 9, 2019 judgments of the 

Paulding County Court of Common Pleas denying their motions for summary 

judgment and for sanctions against plaintiff-appellee, U.S. Bank Trust, N.A., as 

trustee for LSF9 Master Participation Trust (“U.S. Bank”), and granting U.S. Bank’s 

motion for summary judgment. For the reasons that follow, we affirm. 

{¶2} This appeal, the third appeal brought by the Watsons in relation to the 

subject matter of this case, stems from U.S. Bank’s efforts to foreclose on their 

property in Oakwood, Paulding County, Ohio. The factual background and lengthy 

procedural history of this case are discussed in detail in the Watsons’ previous two 

appeals. See HSBC Mtge. Servs., Inc. v. Watson, 3d Dist. Paulding No. 11-14-03, 

2015-Ohio-221 (“Watson I”); HSBC Mtge. Servs., Inc. v. Watson, 3d Dist. Paulding 

No. 11-16-03, 2017-Ohio-680 (“Watson II”). Thus, we will restate the history of 

this dispute only to the extent required to frame the issues presented in the instant 

appeal. 

{¶3} On November 24, 2004, Pamela allegedly signed a promissory note in 

which she agreed to repay Accredited Home Lenders, Inc. (“Accredited”) the sum 

 

1

 In this opinion, we refer to Pamela and William as the Watsons rather than as the Lamberts because 

throughout their appellate brief, Pamela and William refer to themselves as the Watsons. 
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of $79,500 plus interest in monthly installments. (Doc. No. 1, Ex. A). The note was 

secured by a mortgage on real property in Oakwood, Paulding County, Ohio. (Doc. 

No. 1, Ex. B). In the mortgage, Accredited designated Mortgage Electronic 

Registration Systems, Inc. (“MERS”) as its nominee. (Id.). Pamela purportedly 

stopped making payments on the note on April 1, 2011, sometime after which the 

note and mortgage were allegedly assigned and transferred to HSBC Mortgage 

Services, Inc. (“HSBC”). (Doc. No. 36, Exs. A-4, A-8). See Watson II at ¶ 2. 

{¶4} On August 22, 2012, HSBC filed a complaint for foreclosure against 

the Watsons and the Paulding County Treasurer (the “first foreclosure”). Watson I

at ¶ 2. In late April 2013, HSBC filed a motion for summary judgment. Id. at ¶ 4. 

Following HSBC’s motion for summary judgment, the trial court established a 

discovery cutoff date of June 21, 2013. Id. at ¶ 5. On May 24, 2013, the Watsons 

served discovery requests on HSBC, including requests for admissions. Id. at ¶ 6. 

One of these requests for admissions asked HSBC to admit that “HSBC does not 

have possession of the original note * * *.” Id. at ¶ 10. Another requested that 

HSBC admit that neither the person allegedly authorized to assign the mortgage to 

HSBC “nor [MERS] sought or received permission from the Bankruptcy Trustee 

for [Accredited] to execute the assignment of [the Watsons’] mortgage [to HSBC].” 

Watson II at ¶ 3. On June 28, 2013, the trial court granted HSBC’s motion for 

additional time to respond to the Watsons’ discovery requests and ordered that 
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HSBC respond to the Watsons’ requests by July 23, 2013. Watson I at ¶ 7. Yet, 

despite this extension, HSBC failed to respond to the Watsons’ discovery requests 

by July 23, 2013. Id. at ¶ 9. 

{¶5} On August 2, 2013, the Watsons filed a memorandum in opposition to 

HSBC’s motion for summary judgment as well as their own motion for summary 

judgment. Watson I, 2015-Ohio-221, at ¶ 10. To support their motion for summary 

judgment, the Watsons relied on the requests for admissions they propounded to 

HSBC, which were deemed admitted by HSBC’s failure to timely respond. Id. See

Civ.R. 36(A)(1). On August 30, 2013, HSBC filed a combined reply brief in support 

of its motion for summary judgment and memorandum in opposition to the 

Watsons’ motion for summary judgment. Watson I at ¶ 12. HSBC also filed a 

“Civ.R. 36(B) motion to withdraw requests for admission deemed admitted.” Id. 

On September 12, 2013, the Watsons filed their reply brief in support of their motion 

for summary judgment as well as a response to HSBC’s motion to withdraw its 

admissions. Id. at ¶ 13. 

{¶6} On February 12, 2014, the trial court issued an order granting HSBC’s 

motion to withdraw its admissions, granting HSBC’s motion for summary 

judgment, and denying the Watsons’ motion for summary judgment. Id. at ¶ 14. 

On April 18, 2014, the trial court issued a decree of foreclosure in favor of HSBC 

and ordered that the Watsons’ property be sold. Id. at ¶ 15. The Watsons 
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subsequently appealed, arguing that the trial court erred by granting HSBC’s motion 

to withdraw its deemed admissions and by granting HSBC’s motion for summary 

judgment. 

{¶7} On January 26, 2015, this court reversed the judgment of the trial court. 

Id. at ¶ 38. Specifically, we concluded that “the trial court abused its discretion by 

granting HSBC’s motion to withdraw its admissions without allowing [the Watsons] 

to conduct additional discovery.” Id. at ¶ 35. With respect to the trial court’s rulings 

on the parties’ motions for summary judgment, we held that because the trial court’s 

rulings “were based on its erroneous discovery order granting HSBC’s motion to 

withdraw its admissions,” “ruling on either party’s motion for summary judgment 

was premature.” Id. Accordingly, we remanded the matter to the trial court with 

the observation that the trial court could “proceed in any number of ways, including, 

for example, reopening discovery, allowing additional motions concerning 

discovery, and allowing the resubmission of motions for summary judgment.” Id.

at ¶ 37. 

{¶8} On remand, HSBC filed a motion for substitution of plaintiff, in which 

it stated that U.S. Bank had been assigned the mortgage on January 6, 2015 and that 

U.S. Bank was thus the real party in interest. Watson II, 2017-Ohio-680, at ¶ 5. On 

April 23, 2015, the Watsons filed a memorandum in opposition to HSBC’s motion 

for substitution of plaintiff. Id. at ¶ 6. In their memorandum in opposition, the 
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Watsons, “[r]elying upon HSBC’s admission that [it] did not possess the original 

note, * * * argued that neither HSBC nor U.S. Bank could be real parties in interest 

as HSBC had nothing to transfer to U.S. Bank that would justify a substitution of 

plaintiff * * *.” Id. Nevertheless, the trial court ultimately granted HSBC’s motion 

to substitute U.S. Bank as plaintiff. Id. at ¶ 7. 

{¶9} On the same day that the Watsons filed their memorandum in 

opposition to HSBC’s motion for substitution of plaintiff, they also filed a motion 

for R.C. 2323.51 sanctions against HSBC. Id. at ¶ 6. In addition, on February 29, 

2016, the Watsons filed a motion for summary judgment. Id. at ¶ 7. Finally, on 

June 13, 2016, the Watsons submitted a motion asking the trial court to reconsider 

its decision to allow the substitution of U.S. Bank as plaintiff. Id. A hearing on all 

three motions was set for June 24, 2016. Id.

{¶10} At the hearing, HSBC and U.S. Bank argued that the Watsons’ motion 

for summary judgment should be denied to allow for the reopening of discovery. 

See id. at ¶ 7. However, in a July 5, 2016 judgment, the trial court “declined to 

reopen discovery, deemed the admissions of HSBC admitted, * * * granted [the 

Watsons’] motion for summary judgment,” and dismissed the first foreclosure. Id. 

(See Doc. No. 16, Ex. 10). In addition, the trial court rejected the Watsons’ request 

to reconsider its ruling allowing U.S. Bank to be substituted as plaintiff, and “[s]ince 

the alleged frivolous conduct arose from HSBC’s motion to substitute plaintiff,” the 
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trial court denied the Watsons’ motion for sanctions on grounds that granting the 

motion would be inconsistent with the affirmation of its decision permitting the 

substitution. Watson II at ¶ 8. Although U.S. Bank and the Watsons both appealed 

from the trial court’s judgment, U.S. Bank subsequently dismissed its appeal. (See

Doc. No. 16, Exs. 11, 12). In their second appeal, the Watsons argued that the trial 

court erred by permitting U.S. Bank to be substituted as plaintiff and by denying 

their motion for sanctions. 

{¶11} On February 27, 2017, this court affirmed the trial court’s judgment. 

Watson II, 2017-Ohio-680, at ¶ 18. First, we concluded that the Watsons were not 

prejudiced by the substitution of U.S. Bank as plaintiff. Id. at ¶ 11. We observed 

that, “[i]f anything, [the order substituting U.S. Bank as plaintiff] is more likely to 

operate in [the Watsons’] favor as the substitution of U.S. Bank for HSBC binds 

U.S. Bank to the summary judgment order that disposed of [the first foreclosure].” 

Id. Furthermore, we held that the trial court did not abuse its discretion by denying 

the Watsons’ motion for sanctions under R.C. 2323.51. Id. at ¶ 17. We concluded 

that, even assuming that HSBC’s actions amounted to frivolous conduct, the 

Watsons were not adversely affected parties who were eligible for an award of costs, 

fees, and other expenses under R.C. 2323.51. Id. at ¶ 16-17. We justified this 

conclusion, in part, by noting that “HSBC and U.S. Bank would both be barred by 

res judicata from filing this exact same claim a second time * * *.” Id. at ¶ 17. 
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{¶12} Meanwhile, on November 17, 2016, while the appeal in Watson II was 

pending, U.S. Bank refiled the complaint for foreclosure against the Watsons (the 

“second foreclosure”). (Doc. No. 1). On December 5, 2016, the Watsons filed their 

answer to U.S. Bank’s complaint. (Doc. No. 7). That same day, the Watsons filed 

a combined motion for summary judgment and motion for R.C. 2323.51 sanctions. 

(Doc. No. 8). In their combined motion, the Watsons argue that they are entitled to 

summary judgment because the doctrine of res judicata precludes U.S. Bank from 

“asserting the same previously dismissed claim based on the same asserted 

documents.” (Id.). In addition, the Watsons argue that “[t]he refiling of the lawsuit 

four months after it was previously dismissed on summary judgment and after an 

appeal of such prior judgment was abandoned is absolutely and objectively frivolous 

pursuant to R.C. 2323.51.” (Id.). 

{¶13} On January 3, 2017, U.S. Bank filed a memorandum in opposition to 

the Watsons’ motion for summary judgment and a memorandum in opposition to 

the Watsons’ motion for sanctions. (Doc. Nos. 14, 15). On January 11, 2017, the 

Watsons filed their reply brief in support of their motion for summary judgment, 

along with exhibits in support of their motions for summary judgment and for 

sanctions. (Doc. No. 16). In addition, on July 11, 2017, the Watsons provided the 

trial court with a copy of our decision in Watson II and suggested that our decision 

in Watson II prevents U.S. Bank from disputing that it is barred from bringing the 
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second foreclosure. (Doc. No. 22). On February 9, 2018, the trial court denied both 

the Watsons’ motion for summary judgment and their motion for sanctions. (Doc. 

No. 23). 

{¶14} On March 19, 2018, the Watsons filed a motion asking the trial court 

to modify or supplement its February 9, 2018 judgment entry. (Doc. No. 27). In 

their motion, the Watsons requested that the trial court explicitly address the 

doctrine of res judicata and explain why the doctrine of res judicata does not bar 

U.S. Bank from maintaining the second foreclosure. (Id.). On March 23, 2018, 

U.S. Bank filed a memorandum in opposition to the Watsons’ motion to modify or 

supplement. (Doc. No. 29). On April 5, 2018, the Watsons filed their reply brief in 

support of their motion to modify or supplement. (Doc. No. 30). On June 14, 2018, 

the trial court issued an entry in which it clarified the rationale for its conclusion 

that the second foreclosure is not barred by the doctrine of res judicata. (Doc. No. 

31). 

{¶15} On January 22, 2019, U.S. Bank filed a motion for summary judgment. 

(Doc. No. 36). On May 30, 2019, the Watsons filed their memorandum in 

opposition to U.S. Bank’s motion for summary judgment. (Doc. No. 45). That 

same day, the Watsons filed a second motion for summary judgment and a second 

motion for sanctions under R.C. 2323.51. (Doc. No. 46). In their second motion 

for summary judgment, the Watsons reassert their argument that they are entitled to 
Case No. 11-19-09 

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summary judgment based on the doctrine of res judicata, and they further argue that 

summary judgment in their favor is appropriate because U.S. Bank does not, and 

will never, present admissible evidence sufficient to support its claim. (Id.); (See

Doc. No. 49). On June 13, 2019, U.S. Bank filed a combined reply brief in support 

of its motion for summary judgment and memorandum in opposition to the 

Watsons’ second motion for summary judgment and second motion for sanctions. 

(Doc. No. 48). On June 28, 2019, the Watsons filed their reply brief in support of 

their second motion for summary judgment and second motion for sanctions. (Doc. 

No. 49). 

{¶16} On October 8, 2019, the trial court granted U.S. Bank’s motion for 

summary judgment, denied the Watsons’ second motion for summary judgment, 

and denied their second motion for sanctions. (Doc. No. 50). Consequently, the 

trial court issued a decree of foreclosure in favor of U.S. Bank and ordered that the 

Watsons’ property be sold. (Id.). 

{¶17} On November 5, 2019, the Watsons filed a notice of appeal. (Doc. 

No. 51). They raise three assignments of error for our review. For ease of 

discussion, we begin by considering the Watsons’ first and second assignments of 

error together, followed by their third assignment of error. 

Assignment of Error No. I 

The trial court erred in its judgment entry of Feb. 9, 2018 and in 

Oct. 9, 2019 [sic] in denying the Watsons’ motion for summary 
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judgment that asserted U.S. Bank’s complaint was barred by the 

doctrine of res judicata. 

Assignment of Error No. II 

The trial court erred in its Oct. 9, 2019 judgment entry in denying 

the Watsons’ motion for summary judgment and granting U.S. 

Bank’s motion for summary judgment when discovery was 

closed, the facts were undisputed, and the complaint failed to state 

a cause of action and the evidence failed to support the complaint. 

{¶18} In their first and second assignments of error, the Watsons argue that 

the trial court erred by denying their motions for summary judgment and by granting 

U.S. Bank’s motion for summary judgment. Specifically, in their first assignment 

of error, the Watsons argue that the trial court should have granted their motions for 

summary judgment because the doctrine of res judicata precludes U.S. Bank from 

bringing the second foreclosure and from relitigating issues that were resolved 

against it in the first foreclosure. In their second assignment of error, the Watsons 

argue that the trial court erred by granting U.S. Bank’s motion for summary 

judgment and by denying their second motion for summary judgment because the 

affidavit U.S. Bank submitted in support of its motion was not made by someone 

with personal knowledge sufficient to authenticate documents such as the 

promissory note, mortgage, and notice of default, photocopies of which were 

attached to the affidavit and used by U.S. Bank to prove its claim. They also contend 

that the averments in the affidavit were not based on the affiant’s personal 
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knowledge. Finally, the Watsons take issue with U.S. Bank’s evidence establishing 

the chain of assignments from the original lender and mortgagee to U.S. Bank. 

{¶19} We review a decision to grant summary judgment de novo. Doe v. 

Shaffer, 90 Ohio St.3d 388, 390 (2000). “De novo review is independent and 

without deference to the trial court’s determination.” ISHA, Inc. v. Risser, 3d Dist. 

Allen No. 1-12-47, 2013-Ohio-2149, ¶ 25, citing Costner Consulting Co. v. U.S. 

Bancorp, 195 Ohio App.3d 477, 2011-Ohio-3822, ¶ 10 (10th Dist.). Summary 

judgment is proper where there is no genuine issue of material fact, the moving party 

is entitled to judgment as a matter of law, and reasonable minds can reach but one 

conclusion when viewing the evidence in favor of the non-moving party, and the 

conclusion is adverse to the non-moving party. Civ.R. 56(C); State ex rel. Cassels 

v. Dayton City School Dist. Bd. of Edn., 69 Ohio St.3d 217, 219 (1994). 

{¶20} “The party moving for summary judgment has the initial burden of 

producing some evidence which demonstrates the lack of a genuine issue of material 

fact.” Carnes v. Siferd, 3d Dist. Allen No. 1-10-88, 2011-Ohio-4467, ¶ 13, citing 

Dresher v. Burt, 75 Ohio St.3d 280, 292 (1996). “In doing so, the moving party is 

not required to produce any affirmative evidence, but must identify those portions 

of the record which affirmatively support his argument.” Id., citing Dresher at 292. 

“The nonmoving party must then rebut with specific facts showing the existence of 
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a genuine triable issue; he may not rest on the mere allegations or denials of his 

pleadings.” Id., citing Dresher at 292 and Civ.R. 56(E). 

{¶21} Material facts are those facts “‘that might affect the outcome of the 

suit under the governing law.’” Turner v. Turner, 67 Ohio St.3d 337, 340 (1993), 

quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505 (1986). 

“Whether a genuine issue exists is answered by the following inquiry: [d]oes the 

evidence present ‘a sufficient disagreement to require submission to a jury’ or is it 

‘so one-sided that one party must prevail as a matter of law[?]’” Id., quoting 

Anderson at 251-252. 

{¶22} We begin with the Watsons’ first assignment of error, in which they 

argue that the trial court erred by denying their motions for summary judgment 

because, contrary to the trial court’s conclusion, the doctrine of res judicata 

precludes U.S. Bank from bringing the second foreclosure and from relitigating 

certain issues that U.S. Bank must resolve in its favor to prevail on its claim. In 

Ohio, “‘“[t]he doctrine of res judicata encompasses the two related concepts of 

claim preclusion, also known as res judicata or estoppel by judgment, and issue 

preclusion, also known as collateral estoppel.”’” Crown Chrysler Jeep, Inc. v. 

Boulware, 10th Dist. Franklin No. 15AP-162, 2015-Ohio-5084, ¶ 18, quoting State 

ex rel. Schachter v. Ohio Pub. Emps. Retirement Bd., 121 Ohio St.3d 526, 2009-
Case No. 11-19-09 

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Ohio-1704, ¶ 27, quoting O’Nesti v. DeBartolo Realty Corp., 113 Ohio St.3d 59, 

2007-Ohio-1102, ¶ 6. Both concepts are in play in this case. 

{¶23} Claim preclusion, the first type of preclusion, “‘prevents subsequent 

actions, by the same parties or their privies, based upon any claim arising out of a 

transaction that was the subject matter of a previous action.’” Id., quoting Schachter 

at ¶ 27. “‘The previous action is conclusive for all claims that were or that could 

have been litigated in the first action.’” Id., quoting Schachter at ¶ 27. The Supreme 

Court of Ohio has identified four conditions that must be present for claim 

preclusion to apply: 

(1) there is a final, valid decision on the merits by a court of 

competent jurisdiction; (2) the second action involves the same parties 

or their privies as the first; (3) the second action raises claims that 

were or could have been litigated in the first action; and (4) the second 

action arises out of the transaction or occurrence that was the subject 

matter of the previous action. 

State ex rel. Dept. of Edn. v. Ministerial Day Care, 8th Dist. Cuyahoga No. 103685, 

2016-Ohio-8485, ¶ 14, citing Portage Cty. Bd. of Commrs. v. Akron, 109 Ohio St.3d 

106, 2006-Ohio-954, ¶ 84, quoting Hapgood v. Warren, 127 F.3d 490, 493 (6th 

Cir.1997) (construing Grava v. Parkman Twp., 73 Ohio St.3d 379 (1995)). For 

purposes of claim preclusion, a “transaction” has been defined as a “‘common 
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nucleus of operative facts.’” Grava at 382, quoting 1 Restatement of the Law 2d, 

Judgments, Section 24, Comment b (1982). 

{¶24} On the other hand, issue preclusion, the second type of preclusion, 

“serves to prevent relitigation of any fact or point that was determined by a court of 

competent jurisdiction in a previous action between the same parties or their 

privies.” O’Nesti at ¶ 7, citing Fort Frye Teachers Assn., OEA/NEA v. State Emp. 

Relations Bd., 81 Ohio St.3d 392, 395 (1998). “Issue preclusion applies even if the 

causes of action differ.” Id., citing Fort Frye at 395. Issue preclusion prevents the 

relitigation of an issue where (1) the party against whom issue preclusion is asserted 

was a party or is in privity with a party to a prior action; (2) the prior action ended 

in a final judgment on the merits following a full and fair opportunity to litigate the 

issue; (3) the issue was actually litigated and determined and necessary to the 

judgment in the prior action; and (4) the issue sought to be precluded is identical to 

the issue decided in the prior action. See State ex rel. Davis v. Pub. Emp. Retirement 

Bd., 120 Ohio St.3d 386, 2008-Ohio-6254, ¶ 27-28, quoting Fort Frye at 395; Ginn 

v. Stonecreek Dental Care, 12th Dist. Fayette No. CA2016-10-014, 2017-Ohio4370, ¶ 24, citing Balboa Ins. Co. v. S.S.D. Distrib. Sys., 109 Ohio App.3d 523, 527 

(12th Dist.1996); Wilson v. Semco, Inc., 152 Ohio App.3d 75, 2002-Ohio-4695, ¶ 

17 (3d Dist.), quoting Monahan v. Eagle Picher Indus., Inc., 21 Ohio App.3d 179, 

180-181 (1st Dist.1984). 
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{¶25} Before addressing the merits of the Watsons’ first assignment of error, 

we feel that we must clarify their arguments. Throughout their filings in the trial 

court and in their appellate brief, the Watsons regularly refer to the doctrine of res 

judicata. However, they never differentiate between claim preclusion and issue 

preclusion or specify in any given instance whether they are arguing for the 

application of claim preclusion or whether they are arguing for the application of 

issue preclusion. Yet, after reviewing the Watsons’ appellate arguments in light of 

the arguments they made at the trial-court level, it is evident that they rely to some 

extent on both types of preclusion. Although they do not themselves outline their 

arguments in the following manner, we believe that the Watsons are in substance 

making three separate arguments based on claim preclusion and issue preclusion. 

{¶26} First, the Watsons repeatedly invoke this court’s discussion of res 

judicata in Watson II and insist that our statement that U.S. Bank “would * * * be 

barred * * * from filing [the] exact claim a second time” was “necessary to the 

analysis and result reached” in Watson II. (See Appellants’ Brief at 6-7, 10-11); 

(See Doc. Nos. 22, 30). As a result, the Watsons seem to contend that issue 

preclusion bars U.S. Bank from relitigating the issue of whether claim preclusion 

prevents it from filing and maintaining the second foreclosure. Second, the Watsons 

expressly assert that, irrespective of our decision in Watson II, the trial court’s July 

5, 2016 judgment dismissing the first foreclosure was a final adjudication on the 
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merits that itself operates to preclude U.S. Bank from bringing the second 

foreclosure. (See Appellants’ Brief at 6, 11); (See Doc. Nos. 7, 8, 16, 30). Finally, 

the Watsons seem to suggest that the matters deemed admitted in the first 

foreclosure, specifically those matters related to HSBC’s and U.S. Bank’s 

possession of the promissory note and the validity of earlier mortgage assignments, 

remain conclusively established for purposes of the second foreclosure. (See 

Appellants’ Brief at 6-7); (See Doc. Nos. 27, 46, 49). Thus, the Watsons appear to 

argue that issue preclusion prohibits U.S. Bank from relitigating the subject matter 

of the deemed admissions and that they are entitled to judgment as a matter of law 

because U.S. Bank is unable to relitigate these issues. We examine each of these 

arguments in turn, beginning with the argument that our decision in Watson II

prevents U.S. Bank from challenging the Watsons’ contention that claim preclusion 

bars the second foreclosure. 

{¶27} In Watson II, we reviewed two issues stemming from the trial court’s 

July 5, 2016 judgment in the first foreclosure. However, the only part of Watson II 

relevant to the present case is our analysis of the trial court’s decision to deny the 

Watsons’ motion for R.C. 2323.51 sanctions. In the trial court, the Watsons argued 

that sanctions should be imposed against HSBC because HSBC engaged in frivolous 

conduct by moving to substitute U.S. Bank as plaintiff. (See Doc. No. 16, Exs. 5, 

6, 7, 10). After reaffirming its decision to allow U.S. Bank to be substituted as 
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plaintiff for HSBC, the trial court denied the Watsons’ motion for sanctions, 

concluding that it could not “grant [HSBC’s] motion for substitution and call it 

frivolous at the same time.” (Doc. No. 16, Ex. 10). In its July 5, 2016 judgment 

denying the Watsons’ motion for sanctions, the trial court did not reach the question 

of whether the Watsons were adversely affected by HSBC’s conduct. (See id.). See

R.C. 2323.51(B)(1) (a party must be adversely affected by frivolous conduct to be 

entitled to an award of costs, fees, and other expenses). 

{¶28} On appeal, we affirmed the trial court’s judgment denying the 

Watsons’ motion for sanctions. Watson II, 2017-Ohio-680, at ¶ 17-18. We 

acknowledged that “[s]ince the trial court found that HSBC did not engage in 

frivolous conduct, it did not proceed to make a determination for the record as to 

whether [the Watsons were parties] adversely affected by frivolous conduct.” Id. at 

¶ 14. However, rather than limiting our review to a determination of whether the 

trial court correctly concluded that HSBC did not engage in frivolous conduct by 

moving to substitute U.S. Bank as plaintiff, we held that “[e]ven * * * assum[ing] 

that HSBC’s actions amounted to frivolous conduct, [the Watsons were not] 

adversely affected part[ies] that [were] eligible for an award of sanctions for 

frivolous conduct.” Id. at ¶ 17. In reaching this conclusion, we observed that Civ.R.

17 and Civ.R. 25, the rules relating to the real-party-in-interest requirement and the 

substitution of parties, exist, among other reasons, to assure the defendant that he 
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“‘will be protected against another suit brought by the real party [in] interest on the 

same matter.’” Id. at ¶ 15, quoting Argent Mtge. Co. v. Ciemins, 8th Dist. Cuyahoga 

No. 90698, 2008-Ohio-5994, ¶ 10, quoting Shealy v. Campbell, 20 Ohio St.3d 23 

(1985). In our view, the Watsons were not adversely affected by HSBC’s motion 

for substitution in part because their interest in being protected from successive suits 

based on the same claim for foreclosure was not impaired by the substitution of U.S. 

Bank as plaintiff. Specifically, we held: 

[B]ringing in U.S. Bank was not going to expose [the Watsons] to the 

risk of enduring another suit on this same matter. HSBC and U.S. 

Bank would both be barred by res judicata from filing this exact claim 

a second time as HSBC was bound by the assignment [of its interest 

to U.S. Bank], which effectively admitted that [it is] no longer a real 

party in interest, and U.S. Bank was bound by HSBC’s admission that 

it did not have the promissory note. 

Id. at ¶ 16. 

{¶29} Following our decision in Watson II, U.S. Bank filed an application 

for reconsideration in this court in which U.S. Bank asked us to reconsider our 

statement that it would be barred by res judicata from filing an identical claim for 

foreclosure against the Watsons. (See Doc. No. 22). Following briefing on the 

issues presented in U.S. Bank’s application, we denied U.S. Bank’s application for 
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reconsideration. (See id.). There is no indication in the record that U.S. Bank further

appealed to the Supreme Court of Ohio from our decision in Watson II. 

{¶30} After reviewing our decision in Watson II and considering the unique 

circumstances of this case, we conclude that issue preclusion does not prevent U.S. 

Bank from litigating the issue of whether claim preclusion bars it from maintaining 

the second foreclosure. As indicated above, issue preclusion applies only when the 

party against whom issue preclusion is asserted had a full and fair opportunity to 

litigate the issue in the prior action and when the issue was actually litigated in the 

prior action. We believe that, under the peculiar facts of this case, U.S. Bank was 

not afforded a full opportunity in the first foreclosure to litigate the claim-preclusive 

effect of the first foreclosure on subsequent foreclosure actions and that the issue 

was not actually litigated. 

{¶31} First, as far as we can discern from the record, the question of whether 

the first foreclosure precludes the refiling of an identical claim for foreclosure in a 

subsequent foreclosure action was not briefed, passed on, or even mentioned at any 

time prior to the issuance of our opinion in Watson II. It does not appear that the 

Watsons supported their motion for summary judgment or their motion for sanctions 

in the first foreclosure with an argument related to claim preclusion; nor does it 

appear that U.S. Bank opposed the Watsons’ motions or supported its own motions 

in the first foreclosure with such an argument. In addition, in its July 5, 2016 
Case No. 11-19-09 

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judgment, the trial court did not make any determinations with respect to the claimpreclusive effect of the first foreclosure. This is hardly surprising given that we 

used the supposedly claim-preclusive effect of the first foreclosure to support our 

conclusion that the Watsons were not adversely affected by U.S. Bank’s substitution 

as plaintiff—an issue that the trial court never reached. Finally, there is no 

indication that the issue was raised in the parties’ appellate briefs informing our 

decision in Watson II. Thus, our determination in Watson II of the issue of the 

claim-preclusive effect of the first foreclosure does not appear to be the product of 

any actual litigation of the issue. 

{¶32} Furthermore, given the distinctive circumstances of this case, U.S. 

Bank was not afforded, and in fact could not have been afforded, an opportunity to 

obtain regular appellate review of our determination of the issue of the claimpreclusive effect of the first foreclosure. In the average case, the issue of the claimpreclusive effect of a prior final judgment is determined in the first instance at the 

trial-court level. In many cases, the party who receives an unfavorable decision on 

the issue of claim preclusion may then appeal the trial court’s determination to a 

court of appeals, and in most instances, the court of appeals must entertain the 

party’s appeal. If the issue of claim preclusion is resolved adversely to the party by 

the court of appeals, the party may apply for reconsideration of the appellate court’s 

decision. Finally, if the party’s application for reconsideration is denied or if the 
Case No. 11-19-09 

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issue of claim preclusion is decided against the party even after reconsideration, the 

party may petition the Supreme Court of Ohio for review, and aside from a few 

exceptions, the Supreme Court of Ohio has discretion to accept or reject the party’s 

petition for review. 

{¶33} Yet, this case is not the average case. In this case, as far as we can tell, 

the issue of the claim-preclusive effect of the first foreclosure was determined for 

the first time in our opinion in Watson II. As a result, U.S. Bank was deprived of 

the opportunity to utilize the entire array of options for appellate review normally 

available to parties who are adversely affected by decisions relating to the 

applicability of claim preclusion. U.S. Bank’s only options were to ask this court 

to reconsider our decision in Watson II and to petition the Supreme Court of Ohio 

for review. However, both options have their limitations. In deciding whether to 

accept applications for reconsideration, we conduct a type of review that is much 

more limited and specialized than the review we perform when reviewing many trial 

court errors in the first instance. In addition, unlike most of the cases that are 

presented to the courts of appeals for review, the Supreme Court of Ohio likely 

would not have been required to entertain an appeal by U.S. Bank of our decision 

in Watson II. Therefore, the procedures available to U.S. Bank in this particular 

case would not have been suitable substitutes for the ordinary procedures, i.e., an 

initial determination of the issue of claim preclusion and the option of an appeal as 
Case No. 11-19-09 

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of right, only then followed by an application for reconsideration or further appeal. 

U.S. Bank may have had some opportunity to litigate the issue of claim preclusion 

by filing an application for reconsideration and an appeal to the Supreme Court of 

Ohio. However, even if U.S. Bank had taken advantage of both procedures, under 

the facts of this case, U.S. Bank would never have had a full opportunity to litigate 

the issue. For this reason, and for the reasons detailed in the three preceding 

paragraphs, we conclude that our decision in Watson II does not bar U.S. Bank from 

litigating the issue of the claim-preclusive effect of the first foreclosure. Thus, to 

the extent that the Watsons based their motions for summary judgment on the issuepreclusive effect of our decision in Watson II, the trial court did not err by denying 

their motions. 

{¶34} Having concluded that our decision in Watson II does not prevent U.S. 

Bank from litigating the issue of the claim-preclusive effect of the first foreclosure, 

we now consider whether the trial court’s July 5, 2016 judgment in the first 

foreclosure bars U.S. Bank from maintaining the second foreclosure. In its February 

9, 2018 judgment denying the Watsons’ first motion for summary judgment, the 

trial court did not specifically address the claim-preclusive effect of the July 5, 2016 

judgment. (See Doc. No. 23). However, in the trial court’s June 14, 2018 journal 

entry in which it further clarified its decision to deny the Watsons’ first motion for 

summary judgment, the trial court explained that the second foreclosure “is not the 
Case No. 11-19-09 

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exact same claim as [the first foreclosure] as four additional years of non-payment 

are alleged to have occurred in [the second foreclosure]. [U.S. Bank] is not barred 

* * * by the doctrine of res judicata as the present cause of action has not been 

litigated.” (Doc. No. 31). 

{¶35} We conclude that the trial court did not err by holding that the doctrine 

of claim preclusion does not prevent U.S. Bank from bringing the second 

foreclosure, albeit for different reasons than offered by the trial court. Contrary to 

the trial court’s assertion in its June 14, 2018 journal entry, the claim in the second 

foreclosure is identical to the claim in the first foreclosure despite the four additional 

years of alleged nonpayment. In the second foreclosure, U.S. Bank is demanding 

the same principal payment, $74,111.16, as it (and HSBC) demanded in the first 

foreclosure. (Doc. No. 1); (Doc. No. 16, Ex. 1). Furthermore, in the second 

foreclosure, U.S. Bank is using the same alleged default date as was used in the first 

foreclosure. (Doc. No. 1); (Doc. No. 16, Ex. 1). Though additional payments have 

purportedly been missed, the claim in the second foreclosure arises from the same 

set of operative facts as the claim in the first foreclosure—that is, Pamela’s alleged 

failure to make her April 2011 mortgage payment and the consequent acceleration 

of the entire principal balance of her loan. See U.S. Bank Natl. Assn. v. Gullotta, 

120 Ohio St.3d 399, 2008-Ohio-6268, ¶ 27-29, 31, 36 (concluding that a bank’s 

third complaint for foreclosure was barred by claim preclusion, despite the fact that 
Case No. 11-19-09 

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the third complaint was amended to use a different start date for the collection of 

interest, because the complaint “still arose from [the] original default, when the 

entire principal balance became due”). It is therefore the same claim. As a result, 

in concluding that claim preclusion does not bar the second foreclosure because the 

claim in the second foreclosure is not the same as the claim in the first foreclosure, 

the trial court erred. 

{¶36} Nevertheless, “[a] reviewing court will not reverse a correct judgment 

merely because a trial court relied on an erroneous reason as the basis for its 

determination.” Hassey v. Columbus, 10th Dist. Franklin No. 17AP-726, 2018-

Ohio-3958, ¶ 33, citing Joyce v. Gen. Motors Corp., 49 Ohio St.3d 93, 96 (1990) 

and Reid v. Plainsboro Partners, III, 10th Dist. Franklin No. 09AP-442, 2010-Ohio4373, ¶ 20. In its July 5, 2016 judgment in the first foreclosure, the trial court 

“consider[ed] the admissions deemed admitted, specifically that the note * * * is 

endorsed in blank and that [U.S. Bank] is not in possession of the note.” (Doc. No. 

16, Ex. 10). After holding that U.S. Bank would need to prove its possession of the 

note indorsed in blank to prevail in the first foreclosure and that U.S. Bank could 

not meet this burden due to the deemed admissions, the trial court granted the 

Watsons’ motion for summary judgment and dismissed U.S. Bank’s complaint. 

(Id.). 
Case No. 11-19-09 

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{¶37} While the trial court did not explicitly state that it was dismissing the 

first foreclosure because U.S. Bank could not prove that it had standing, given that 

the court’s judgment was based entirely on U.S. Bank’s inability to prove possession 

of the promissory note, the only fair reading of the trial court’s judgment is that it 

dismissed the first foreclosure on standing grounds. See generally Fed. Home Loan 

Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, ¶ 20-39 (holding 

that, in a foreclosure action, a party does not have standing to invoke the jurisdiction 

of a common pleas court unless it can establish that it had an interest in the note or 

mortgage at the time suit was filed). In a foreclosure action, a dismissal for lack of 

standing does not involve an adjudication on the underlying indebtedness and has 

“no effect on the underlying duties, rights, or obligations of the parties.” Id. at ¶ 40. 

Furthermore, “the dismissal of an action because one of the parties is not a real party 

in interest or does not have standing is not a dismissal on the merits for purposes of 

res judicata.” State ex rel. Coles v. Granville, 116 Ohio St.3d 231, 2007-Ohio-6057, 

¶ 51. Because the trial court’s July 5, 2016 dismissal was not an adjudication on the 

merits, claim preclusion does not bar U.S. Bank from bringing the second 

foreclosure. See Douglas v. Williams, 9th Dist. Summit No. 27459, 2015-Ohio1721, ¶ 5; U.S. Bank Natl. Assn. v. Perry, 8th Dist. Cuyahoga No. 99608, 2013-

Ohio-3814, ¶ 12 (“Because the dismissal was without prejudice, U.S. Bank can 

refile the [foreclosure] action when it has uncontroverted evidence of its standing.”). 
Case No. 11-19-09 

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Therefore, although the trial court’s reasons were incorrect, the trial court did not 

err by concluding that claim preclusion does not bar U.S. Bank from bringing the 

second foreclosure. Accordingly, to the extent that the Watsons based their motions 

for summary judgment on the claim-preclusive effect of the first foreclosure, the 

trial court did not err by denying their motions. 

{¶38} Finally, we consider whether the trial court erred by determining that 

U.S. Bank is not precluded in the second foreclosure from litigating the matters 

deemed admitted in the first foreclosure. In denying the Watsons’ first motion for 

summary judgment, the trial court held that “the admission that [U.S. Bank] did not 

have the note was for [the first foreclosure] action only” and that U.S. Bank “is not 

bound by [its] admission in [the first foreclosure].” (Doc. No. 23). The Watsons 

contend that the trial court erroneously credited U.S. Bank’s “simplistic argument * 

* * that judicial admissions are limited to the case in which they are made, and are 

not binding in a new case,” an argument that the Watsons concede “is true, but a 

misdirection.” (Appellants’ Brief at 6). The Watsons argue that, in this case, 

preclusion arises not by operation of the deemed admissions alone, but “from the 

final judgment that occurred as a result of the evidence in the first case,” “from the 

failure to pursue an appeal taken from said judgment,” and “from the failure to 

appeal the denial of [the application for reconsideration] * * *.” (Id. at 6-7). 
Case No. 11-19-09 

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{¶39} The Watsons’ arguments are without merit. Under Civ.R. 36(A), “[a] 

party may serve upon any other party a written request for the admission, for 

purposes of the pending action only, of the truth of any matters within the scope of 

Civ.R. 26(B) set forth in the request, that relate to statements or opinions of fact or 

of the application of law to fact * * *.” “Any matter admitted under [Civ.R. 36] is 

conclusively established unless the court on motion permits withdrawal or 

amendment of the admission.” Civ.R. 36(B). However, “[a]ny admission made by 

a party under this rule is for the purpose of the pending action only and is not an 

admission by the party for any other purpose nor may it be used against the party in 

any other proceeding.” Id.

{¶40} Although the text of Civ.R. 36 suggests that matters admitted in one 

action are not given issue-preclusive effect in a subsequent action, we have been 

unable to locate any Ohio state court decisions squarely addressing this issue. The 

few cases that we have found that deal with the attempted use of Civ.R. 36 

admissions in subsequent actions did not arise, as this case does, out of 

circumstances in which a matter is deemed admitted in one action, a judgment is 

entered in that action solely on the basis of the admitted matter, and a party seeks to 

litigate the subject matter of the deemed admission in a second action. Moreover, 

the courts that have examined the conclusiveness of Civ.R. 36 admissions in 

subsequent actions have not done so through the lens of issue preclusion. 
Case No. 11-19-09 

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Nevertheless, after examining Civ.R. 36, precedent of the Supreme Court of Ohio, 

and other relevant case law, we believe that Civ.R. 36 admissions should not be 

granted issue-preclusive effect in subsequent actions because issues established by 

Civ.R. 36 admissions are not “actually litigated.” 

{¶41} In State ex rel. Davis v. Public Employees Retirement Board, the 

Supreme Court of Ohio reviewed the Tenth District Court of Appeals’s conclusion 

that a prior decision of the Supreme Court of Ohio “did not collaterally estop 

appellees’ claims that they were public employees when they worked for [the 

Franklin County Public Defender’s Office (“FCPDO”)]” because, in the prior case, 

the court “did not actually litigate and determine” FCPDO’s status as a public 

employer after it was incorporated as a nonprofit organization in 1984. 120 Ohio 

St.3d 386, 2008-Ohio-6254, at ¶ 29. The court observed that, “[i]n effect, the 

claimants’ failure to raise or contest the issue [of FCPDO’s postincorporation status] 

in [the prior case] * * * was tantamount to a stipulation in those cases that FCPDO 

was a private employer after its incorporation in 1984,” and it quoted the 

Restatement’s position that an issue is not actually litigated “‘if it is the subject of a 

stipulation between the parties.’” Id. at ¶ 35, quoting 1 Restatement of the Law 2d, 

Judgments, Section 27, Comment e (1982). The court also cited to one of its 

previous cases, in which it suggested that matters established by stipulation in earlier 

actions are not subject to issue preclusion. Id., citing Consolo v. Cleveland, 103 
Case No. 11-19-09 

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Ohio St.3d 362, 2004-Ohio-5389, ¶ 9 (holding that a stipulation in a prior action 

that a union was a collective-bargaining representative did not collaterally estop a 

group of appellees from asserting that the union is not their exclusive bargaining 

representative). Ultimately, the court concluded that the claimants in Davis were 

not barred from litigating FCPDO’s postincorporation status because that issue had 

not been “actually decided” in earlier cases. Id. at ¶ 36. However, the court stopped 

short of stating plainly that issue preclusion did not apply because issues established 

by stipulation are not “actually litigated.” See id. 

{¶42} While the court in Davis did not hold, in so many words, that matters 

stipulated to in previous actions are not “actually litigated” for purposes of issue 

preclusion, the court’s opinion can be fairly construed as supporting this 

proposition. And though the court in Davis did not consider whether matters 

admitted under Civ.R. 36 are “actually litigated” or even reference Civ.R. 36, we 

think that this proposition is equally valid with respect to admissions made under 

Civ.R. 36. First, Civ.R. 36 admissions function very similarly to stipulations. See 

In re Cassidy, 892 F.2d 637, 640 (7th Cir.1990), fn. 1 (analogizing deemed 

admissions to stipulations). Indeed, the Staff Notes to Civ.R. 36 provide that “Rule 

36 admissions are not evidentiary admissions such as admissions against interest, 

but are more in the nature of stipulations.” 1970 Staff Note, Civ.R. 36. Moreover, 

the section of the Restatement that the court quoted with apparent approval in Davis
Case No. 11-19-09 

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also provides that an issue is not actually litigated “if it is raised in an allegation by 

one party and is admitted by the other before evidence on the issue is adduced at 

trial * * *.” 1 Restatement, Section 27, Comment e. 

{¶43} Furthermore, at least one court has relied on Davis, along with federal 

authority, to conclude that, under Ohio law, matters deemed admitted under Civ.R. 

36 in a prior action are not subject to issue preclusion in a subsequent action. In re 

Somogye, Bankr.N.D.Ohio No. 18-30927, 2018 WL 5810447 (Nov. 5, 2018). The 

question in Somogye was the same as in the instant case: “whether a judgment based 

on admissions under [Civ.R. 36], as opposed to the admissions themselves, can be 

used in a later proceeding to preclude litigation of the factual issues admitted.” Id.

at *5. The court noted that in the federal cases it reviewed, the courts “uniformly 

held that a judgment based on admissions under [Fed.R.Civ.P. 36] (or its counterpart 

under federal Tax Court Rule 90(f)) does not have issue preclusive effect in a later 

proceeding.” Id. at *5-6 (collecting cases). The court then proceeded to examine 

Davis, concluding: 

While the Ohio Supreme Court has not addressed the issue preclusive 

effect of a judgment based on deemed admissions under [Civ.R. 36], 

to the extent that such admissions can be considered a type of 

stipulation * * *, Davis lends strong support for concluding that the 

Ohio Supreme Court would find that factual findings in a prior 
Case No. 11-19-09 

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judgment based upon deemed admissions were not “actually 

litigated.” 

Id. at *7. Finally, the court expressed its belief that the Supreme Court of Ohio 

would reach the same result by “simply giving effect to the stated limitation in 

[Civ.R. 36]” that deemed admissions are conclusive only for purposes of the action 

in which they are made. Id.

{¶44} Accordingly, based on the weight of authority, we conclude that issue 

preclusion does not bar U.S. Bank from relitigating the matters that were deemed 

admitted in the first foreclosure and served as the basis of the trial court’s July 5, 

2016 judgment dismissing the first foreclosure. As a result, to the extent that the 

Watsons based their motions for summary judgment on the issue-preclusive effect 

of the matters deemed admitted in the first foreclosure, the trial court did not err by 

denying their motions. Further, as explained above, neither claim preclusion nor 

issue preclusion otherwise bars U.S. Bank from bringing the second foreclosure. 

Accordingly, we conclude that the trial court did not err by denying the Watsons’ 

first motion for summary judgment or by denying their second motion for summary 

judgment insofar as their second motion for summary judgment is based on the 

applicability of claim preclusion and issue preclusion. 

{¶45} Next, we consider the Watsons’ second assignment of error, in which 

they argue that the trial court erred by granting U.S. Bank’s motion for summary 
Case No. 11-19-09 

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judgment and denying their second motion for summary judgment. In their second 

assignment of error, the Watsons propose that the trial court erred by denying their 

second motion for summary judgment for the exact same reason that it erred by 

granting U.S. Bank’s motion for summary judgment. They argue that the trial court 

should have granted their second motion for summary judgment and denied U.S. 

Bank’s motion for summary judgment because U.S. Bank did not and cannot 

produce admissible evidence to prove its claim. 

{¶46} In support of its motion for summary judgment, U.S. Bank submitted 

the affidavit of Melinda Patterson (“Patterson”), an officer of U.S. Bank’s loan 

servicer, Caliber Home Loans, Inc. (“Caliber”). (Doc. No. 31). The following 

documents are attached to Patterson’s affidavit: a photocopy of a promissory note 

signed and initialed by a Pamela J. Watson, as well as an allonge to the note which 

is indorsed in blank; a photocopy of a mortgage signed and initialed by a Pamela J. 

Watson; a photocopy of a corporate assignment of mortgage indicating that the 

mortgage was assigned by MERS, as nominee for Accredited, to HSBC; a 

photocopy of a limited power of attorney authorizing Caliber to take all reasonable 

steps to complete the assignment of mortgages from a number of sellers, including 

HSBC, to LSF9 Mortgage Holdings, LLC; a photocopy of an assignment of 

mortgage and note purporting to assign the mortgage and note from HSBC to U.S. 

Bank as trustee for LSF9 Master Participation Trust; a copy of a computer 
Case No. 11-19-09 

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spreadsheet purporting to depict the history of payments on the note and showing 

an outstanding principal balance of $74,111.16 as of March 1, 2011; and a 

communication dated October 14, 2011, which is titled “Notice of Right to Cure 

Default.” (Doc. No. 31, Exs. A-1, A-3, A-4, A-5, A-6, A-7, A-8). In her affidavit, 

Patterson avers that U.S. Bank “had possession of the original blank indorsed Note 

at the time the Complaint was filed * * * and continues to have possession of the 

original Note.” (Doc. No. 31). She also asserts that U.S. Bank “is the current 

assignee of the Mortgage and was the assignee of the Mortgage at the time of the 

filing of the Complaint,” that Pamela defaulted on the note, that Pamela’s default 

has not been cured, that all conditions precedent have been complied with, and that 

$74,111.16, plus interest, is owing as of March 1, 2011. (Id.). 

{¶47} The Watsons argue that the averments in Patterson’s affidavit and the 

documents attached to the affidavit are not competent summary judgment evidence. 

Specifically, the Watsons note that Patterson’s affidavit “was made solely as an 

officer of [Caliber].” (Appellants’ Brief at 7). They argue that Patterson is not an 

officer or employee “of [HSBC] that can authenticate the documents submitted by 

U.S. Bank * * * as required by Civ.R. 56 and Evid.R. 801, 802, and 803(6).” (Id.). 

The Watsons conclude that Patterson’s affidavit was “not [made] on personal 

knowledge, or as [a] custodian[] of business records of [Accredited], or [HSBC] and 

do[es] not provide any admissibility or evidentiary support” for most of the exhibits 
Case No. 11-19-09 

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attached thereto. (Id. at 9). Thus, they contend that the documents attached to 

Patterson’s affidavit are not admissible under the business-records exception to the 

hearsay rule. See Evid.R. 803(6). 

{¶48} The Watsons’ argument is without merit. This court has previously 

considered and rejected arguments like the one raised by the Watsons. See Secy. of 

Veterans Affairs v. Leonhardt, 3d Dist. Crawford No. 3-14-04, 2015-Ohio-931, ¶ 

40-60. Other courts have also rejected similar arguments. As explained by the 

Second District Court of Appeals, in mortgage-foreclosure cases, 

“a court may admit a document as a business record [under Evid.R. 

803(6)] even when the proffering party is not the maker of the 

document, if the other requirements of Evid.R. 803(6) are met and the 

circumstances suggest that the record is trustworthy.” U.S. Bank, N.A. 

v. Christmas, 2d Dist. Montgomery No. 26695, 2016-Ohio-236, ¶ 18, 

vacated on other grounds, 146 Ohio St.3d 1468, 2016-Ohio-5108, 54 

N.E.3d 1267, citing Great Seneca Financial v. Felty, 170 Ohio 

App.3d 737, 2006-Ohio-6618, 869 N.E.2d 30, ¶ 14 (1st Dist.); Secy. 

of Veterans Affairs v. Leonhardt, 2015-Ohio-931, 29 N.E.3d 1, ¶ 57 

(3d Dist.); State Farm Mut. Auto. Ins. Co. v. Anders, 197 Ohio App.3d 

22, 2012-Ohio-824, 965 N.E.2d 1056, ¶ 24 (10th Dist.). 

“Trustworthiness of a record is suggested by the profferer’s 
Case No. 11-19-09 

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incorporation into its own records and reliance on it.” Christmas, 

2016-Ohio-236, ¶ 18, citing Leonhardt at ¶ 58. “Because ‘if 

information is sufficiently trustworthy that a business is willing to rely 

on it in making business decisions, the courts should be willing to rely 

on that information as well.’” Id., quoting Quill v. Albert M. Higley 

Co., 2014-Ohio-5821, 26 N.E.3d 1187, ¶ 44 (5th Dist.) (referring to 

this as the rationale behind the business-records exception), citing 

1980 Staff Note, Evid.R. 803(6). 

Ocwen Loan Servicing, LLC v. Malish, 2d Dist. Montgomery No. 27532, 2018-

Ohio-1056, ¶ 23. In Leonhardt, we explained why business records maintained by 

mortgage servicers, consisting in part of documents originally generated and 

maintained by other entities, are particularly trustworthy: 

Because of the nature of the mortgage industry, many mortgage 

lenders rely on mortgage servicers to handle the daily functions of 

mortgages. Similarly, the mortgage servicer may change throughout 

the life of the loan. Considering the business relationship between the 

mortgage lender and the mortgage servicer, as well as amongst 

successor mortgage servicers, these entities rely on the underlying 

loan records for accuracy in conducting ordinary business functions—

that is, the mortgage servicers are under a business duty to the 
Case No. 11-19-09 

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mortgage lender to be accurate and successor mortgage servicers rely 

on the records of prior mortgage servicers for accuracy in servicing 

the loan. 

Id. at ¶ 59. 

{¶49} In her affidavit, Patterson states that she is authorized to execute the 

affidavit on behalf of U.S. Bank in her capacity as an “authorized officer” of Caliber 

and that “[i]n the regular performance of [her] job functions, [she has] personal 

knowledge obtained through a review of the business records maintained by Caliber 

for the purpose of servicing mortgage loans.” (Doc. No. 31). She states that her job 

responsibilities include “reviewing the internal record-keeping systems of Caliber,” 

“reviewing the loan document,” and “ensuring completeness and accuracy of the 

loan documents and loan histories.” (Id.). Patterson’s affidavit also states that 

Caliber’s business records are made “at or near the time of the occurrence of the 

matters,” “recorded by persons with knowledge of the information in the business 

record, or from information transmitted by persons with knowledge,” “kept in the 

course of Caliber’s regularly conducted business activities,” and “created by Caliber 

as a regular practice.” (Id.). See Evid.R. 803(6). The affidavit further provides that 

“Caliber’s records incorporate the records of their predecessors in interest, and the 

prior servicers of this mortgage loan, * * * which are maintained and relied upon 

[in] the regular course of business by Caliber.” (Doc. No. 31). Finally, the affidavit 
Case No. 11-19-09 

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provides that it was made “from a review of those business records and from 

[Patterson’s] knowledge of how said records are created and maintained,” that the 

documents attached to the affidavit were copied from the business records Patterson 

reviewed prior to making the affidavit, and that the documents attached to the 

affidavit are true and accurate copies of the original business records. (Id.). 

{¶50} Based on the averments in her affidavit, Patterson is a person qualified 

to authenticate Caliber’s business records pursuant to Evid.R. 803(6) because the 

statements in her affidavit show that she “is sufficiently familiar with [Caliber’s] 

business operations and the preparation, maintenance, and retrieval of [Pamela’s] 

loan documents” to reasonably attest that “the records are what they purport to be 

and that they were made in the ordinary course of business.” Leonhardt at ¶ 51, 

citing Pyles v. Midwest Neurosurgeons, 3d Dist. Allen No. 1-98-41, 1999 WL 

152886, *5 (Feb. 18, 1999) and Anders at ¶ 15. See Secy. of Veterans Affairs v. 

Anderson, 8th Dist. Cuyahoga No. 99957, 2014-Ohio-3493, ¶ 25 (“Employees of 

servicing agents are competent to testify in foreclosure actions regarding loans they 

service.”). Furthermore, Patterson’s affidavit establishes that Caliber’s business 

records satisfy the requirements of Evid.R. 803(6) and that the documents attached 

to the affidavit, which Patterson reviewed before making the affidavit, are part of 

Caliber’s business records. 
Case No. 11-19-09 

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{¶51} Moreover, Patterson’s statement that Caliber’s records incorporate the 

records of its predecessors and that Caliber maintains and relies on its predecessors 

records in the regular course of business indicates that Caliber deems its 

predecessors’ records to be trustworthy, and we have found no reason to doubt the 

trustworthiness of the source of the information in Caliber’s records or the 

circumstances of their preparation. See Malish, 2018-Ohio-1056, at ¶ 25. 

Therefore, the documents attached to Patterson’s affidavit are properly 

authenticated and admissible under Evid.R. 803(6), and the averments in Patterson’s 

affidavit, made after she reviewed Caliber’s business records, are properly based on 

Patterson’s personal knowledge of the facts contained in Caliber’s authenticated 

business records. See id.; U.S. Bank, N.A. v. Stocks, 2d Dist. Montgomery No. 

27400, 2017-Ohio-8108, ¶ 61 (“‘That an affiant relies on business records for her 

facts does not mean that the facts are not based on personal knowledge.’”), quoting 

Bibbs v. Cinergy Corp., 1st Dist. Hamilton No. C-010390, 2002 WL 537628, *2 

(Apr. 12, 2002); PNC Mtge. v. Krynicki, 7th Dist. Mahoning No. 15 MA 0194, 

2017-Ohio-808, ¶ 9-11, 13-15. Accordingly, we reject the Watsons’ argument that 

U.S. Bank fails to support its motion for summary judgment with competent 

evidence. As we have rejected the Watsons’ challenge to the admissibility of U.S. 

Bank’s summary judgment evidence, we conclude that the trial court did not err by 
Case No. 11-19-09 

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denying the Watsons’ second motion for summary judgment or by refusing to deny 

U.S. Bank’s motion for summary judgment for lack of competent evidence. 

{¶52} Nonetheless, while we have concluded that U.S. Bank supports its 

motion for summary judgment with competent evidence, U.S. Bank must still show 

that there are no genuine issues of material fact with respect to the essential elements 

of its claim and that it is entitled to judgment as a matter of law. When moving for 

summary judgment in a foreclosure action, the plaintiff must present evidentiaryquality materials demonstrating: 

“(1) the movant is the holder of the note and mortgage, or is a party 

entitled to enforce the instrument; (2) if the movant is not the original 

mortgagee, the chain of assignments and transfers; (3) the mortgagor 

is in default; (4) all conditions precedent have been met; and (5) the 

amount of principal and interest due.” 

Bank of New York Mellon v. Bridge, 9th Dist. Summit No. 28461, 2017-Ohio-7686, 

¶ 10, quoting Bank of Am., N.A. v. Edwards, 9th Dist. Lorain Nos. 15CA010848 and 

15CA010851, 2017-Ohio-4343, ¶ 10. We conclude that U.S. Bank has carried its 

initial burden of demonstrating the absence of genuine issues of material fact with 

respect to each of these five elements. 

{¶53} First, Patterson’s statement that U.S. Bank was in possession of the 

note allegedly signed by Pamela when it filed the second foreclosure, her statement 
Case No. 11-19-09 

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that U.S. Bank is still in possession of the note, and the photocopies of the note and 

the allonge containing a blank indorsement demonstrate that U.S. Bank had standing 

to file the second foreclosure and is the holder of the note. “When an instrument is 

indorsed in blank, the instrument becomes payable to bearer and may be negotiated 

by transfer of possession alone until specially indorsed.” R.C. 1303.25(B). A 

“holder” includes a person who is in possession of an instrument payable to bearer. 

R.C. 1301.201(B)(21)(a); Watson I, 2015-Ohio-221, at ¶ 25, quoting BAC Home 

Loans Servicing, L.P. v. Haas, 3d Dist. Marion No. 9-13-40, 2014-Ohio-438, ¶ 27. 

Therefore, by offering evidence that it was in possession of the note, which is 

indorsed in blank, at the time it filed the second foreclosure and that it remains in 

possession of the note, U.S. Bank has presented evidence sufficient to establish that 

it had standing to bring the second foreclosure and that it is the holder of the note. 

{¶54} In addition, the photocopies of the mortgage and note allegedly

executed by Pamela, the various assignments, and the power of attorney document, 

along with Patterson’s averments that U.S. Bank was the assignee of the mortgage 

when it filed the second foreclosure and that it is the current assignee, are sufficient 

to bolster U.S. Bank’s standing to bring the second foreclosure, to establish its status 

as holder of the mortgage, and to demonstrate the chain of assignments and transfers 

culminating in its acquisition of the mortgage and note. Nonetheless, the Watsons 

contend that U.S. Bank’s evidence fails to establish a complete, valid chain of 
Case No. 11-19-09 

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transfers. They argue that U.S. Bank’s documents do “not contain [a] listing of the 

mortgage loans referred to in the limited power of attorney” and that its documents 

“certainly do[] not establish that a mortgage loan of [Pamela] was included in such 

power of attorney.” (Appellants’ Brief at 8). The Watsons attempt to portray their 

argument as a challenge to U.S. Bank’s assertion that it is actually the assignee of 

the mortgage. (See id. at 9) (citing two cases allegedly dealing with the “issue of 

missing documents which would show the specific mortgage loan was transferred” 

and the “lack of chain of title by failure to provide documents of a specific obligation 

being transferred or assigned”). 

{¶55} Regardless of the way that the Watsons style their argument, by

disputing that the mortgage allegedly signed by Pamela was one of the mortgages 

that Caliber was authorized to assign, but failing to account for the copy of the 

recorded assignment between HSBC and U.S. Bank, it is clear that the Watsons are 

challenging whether the mortgage was validly assigned to U.S. Bank rather than 

challenging whether it was actually assigned. Yet, under the facts of this case, the 

Watsons lack standing to challenge the validity of the assignment from HSBC to 

U.S. Bank. Christiana Trust v. Berter, 12th Dist. Butler No. CA2019-07-109, 2020-

Ohio-727, ¶ 33, quoting MidFirst Bank v. Wallace, 12th Dist. Warren No. CA2013-

07-053, 2014-Ohio-4525, ¶ 14 (“‘[W]hen a debtor or mortgagor is neither a party 

to, nor a third-party beneficiary of, the assignment of a mortgage, the debtor or 
Case No. 11-19-09 

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mortgagor lacks standing to challenge the validity of the mortgage assignment 

between an assignor and an assignee.’”); Chase Home Fin., L.L.C. v. Heft, 3d Dist. 

Logan Nos. 8-10-14 and 8-11-16, 2012-Ohio-876, ¶ 37. Because the Watsons do 

not otherwise contest that the mortgage was actually assigned to U.S. Bank, their 

arguments do not alter our conclusion that U.S. Bank has further shown that it had 

standing to bring the second foreclosure, established its status as holder of the 

mortgage, and demonstrated the chain of assignments. 

{¶56} Furthermore, by providing Patterson’s sworn statement that the note 

is in default, her recitation of the amount of principal and interest due, a copy of the 

computer spreadsheet documenting the payment history on the note, and a copy of 

the default notice letter, U.S. Bank has shown that the note is in default and 

evidenced the amount of principal and interest due. Generally, “an affidavit 

establishing a loan is in default is sufficient to demonstrate entitlement to summary 

judgment where there is no evidence controverting the affiant’s averments.” Fifth 

Third Mtge. Co. v. Fantine, 5th Dist. Fairfield No. 15-CA-5, 2015-Ohio-4260, ¶ 21, 

citing Cent. Mtge. Co. v. Elia, 9th Dist. Summit No. 25505, 2011-Ohio-3188, ¶ 7. 

Moreover, courts have held that “‘an averment of outstanding indebtedness made in 

the affidavit of a[n] * * * officer with personal knowledge of the debtor’s account 

is sufficient to establish the amount due and owing on the note, unless the debtor 

refutes the averred indebtedness with evidence that a different amount is owed.’” 
Case No. 11-19-09 

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Id. at ¶ 27, quoting JPMorgan Chase Bank, N.A. v. Salazar, 6th Dist. Lucas No. L13-1038, 2014-Ohio-1002, ¶ 13 and citing Natl. City Bank v. TAB Holdings, Ltd., 

6th Dist. Erie No. E-10-060, 2011-Ohio-3715, ¶ 12. In addition, because copies of 

the documents that Patterson relied on to inform her averments were attached to her 

affidavit, her averments concerning default and the principal and interest due can be 

properly considered in determining whether U.S. Bank demonstrated that the note 

is in default and established the amount of principal and interest due. See HSBC 

Bank USA, Natl. Assn. v. Webb, 10th Dist. Franklin No. 16AP-845, 2017-Ohio9285, ¶ 15-17. Thus, U.S. Bank’s evidence is sufficient to meet its initial burden of 

showing that the note is in default and of demonstrating the amount of principal and 

interest due. 

{¶57} Finally, we are satisfied that there is no genuine issue of material fact 

with respect to whether all conditions precedent have been met. U.S. Bank contends 

that Patterson’s averments and the “Notice of Right to Cure Default” letter, which, 

under the terms of the mortgage, was required to be sent prior to accelerating the 

loan and filing for foreclosure, are sufficient to demonstrate that all conditions 

precedent have been met. However, even assuming that this evidence does not show 

that all conditions precedent have been satisfied, based on our review of the parties’ 

pleadings, we find it to be beyond argument that all conditions precedent have been 

met. 
Case No. 11-19-09 

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{¶58} In paragraph one of its complaint, U.S. Bank averred generally that it 

has “complied with all conditions precedent as set forth in the note and mortgage.” 

(Doc. No. 1). U.S. Bank’s pleading is permissible under Civ.R. 9(C), which 

provides that “[i]n pleading the performance or occurrence of conditions precedent, 

it is sufficient to aver generally that all conditions precedent have been performed 

or have occurred.” In contrast, the denial of the performance or occurrence of 

conditions precedent “shall be made specifically and with particularity.” Civ.R. 

9(C). The performance of conditions precedent is deemed admitted “when [a] party 

fail[s] to deny that the conditions precedent had been satisfied with the specificity 

required by Civ.R. 9(C).” Bank of Am., N.A. v. Calloway, 8th Dist. Cuyahoga No. 

103622, 2016-Ohio-7959, ¶ 19, citing Bank of Am., N.A. v. Michko, 8th Dist. 

Cuyahoga No. 101513, 2015-Ohio-3137, ¶ 20-21; U.S. Bank Natl. Assn. v. Stanze, 

2d Dist. Montgomery No. 25554, 2013-Ohio-2474, ¶ 13-14, quoting Lewis v. WalMart, Inc., 10th Dist. Franklin No. 93AP-121, 1993 WL 310411, *3 (Aug. 12, 

1993). Here, in their answer, the Watsons generally denied paragraphs one through 

four of U.S. Bank’s complaint. (Doc. No. 7). Therefore, because the Watsons failed 

to deny the performance of conditions precedent specifically and with particularity 

as required by Civ.R. 9(C), the performance of all conditions precedent is deemed 

admitted for purposes of this action. 
Case No. 11-19-09 

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{¶59} Aside from their challenge to the validity of the assignment of the 

mortgage and note from HSBC to U.S. Bank, which we addressed above, the 

Watsons do not seriously dispute any of the material facts of this case or offer any 

evidence contradicting U.S. Bank’s evidence. The Watsons present no evidence 

suggesting that Pamela did not sign the note and mortgage attached to U.S. Bank’s 

motion for summary judgment. The Watsons present no evidence suggesting that 

U.S. Bank is not the holder of the note or that the mortgage was not in fact assigned 

to U.S. Bank. The Watsons present no evidence suggesting that Pamela is not in 

default of her obligations under the note. The Watsons do not assert that a different 

amount of principal and interest is due, and while their noncompliance with Civ.R. 

9(C) would likely frustrate any effort to prove that there are conditions precedent 

that have not been met, they do not argue that there are conditions precedent that 

have not been performed. The Watsons have simply failed to rebut with specific 

facts showing that there are any genuine issues for trial. 

{¶60} For these reasons, we conclude that there are no genuine issues of 

material fact with respect to any of the elements of U.S. Bank’s claim and that U.S. 

Bank is entitled to judgment as a matter of law. Accordingly, we conclude that the 

trial court did not err by granting U.S. Bank’s motion for summary judgment. 

{¶61} The Watsons’ first and second assignments of error are overruled. 
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Assignment of Error No. III 

The trial court erred in failing to consider and to award sanctions 

pursuant to R.C. 2323.51. 

{¶62} In their third assignment of error, the Watsons argue that the trial court 

erred by failing to grant either of their motions for sanctions. Specifically, the 

Watsons argue that U.S. Bank engaged in frivolous conduct because existing law 

did not support its decision to file the second foreclosure and it did not have a good 

faith argument for changing existing law. (Appellants’ Brief at 9-11). Concerning 

the “existing law,” the Watsons claim that “it must have been crystal clear to U.S. 

Bank and its counsel after its motion to reconsider the res judicata portion of 

[Watson II] was denied * * * that res judicata barred the complaint in this case * * 

*.” (Id. at 10). Thus, they contend, “[a]ll the conduct of U.S. Bank and its counsel 

in refusing to dismiss the second complaint and in resisting the summary dismissal 

of such complaint was not only frivolous, but knowingly frivolous.” (Id.). 

Moreover, the Watsons argue that “U.S. Bank and its counsel acted frivolously in 

multiple areas when its * * * complaint [in the second foreclosure] failed to allege 

that * * * Pamela * * * signed or otherwise made the note and mortgage or that she 

was in default of said note and mortgage.” (Id.). Finally, the Watsons argue 

generally that U.S. Bank acted frivolously because it did not support its motion for 

summary judgment with competent evidence or provide evidence going to all the 

elements of its claim. (Id. at 10-11). 
Case No. 11-19-09 

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{¶63} R.C. 2323.51 is one of two mechanisms provided by Ohio law “for an 

aggrieved party to recover attorney fees, court costs, and other reasonable expenses 

arising out of frivolous conduct * * *.” Reddy v. Singh, 3d Dist. Marion No. 9-14-

29, 2015-Ohio-1180, ¶ 69, citing ABN AMRO Mtge. Group, Inc. v. Evans, 8th Dist. 

Cuyahoga No. 98777, 2013-Ohio-1557, ¶ 15, citing Sigmon v. S.W. Gen. Health 

Ctr., 8th Dist. Cuyahoga No. 88276, 2007-Ohio-2117, ¶ 14. Under R.C. 2323.51, 

“at any time not more than thirty days after the entry of final judgment in a civil 

action or appeal, any party adversely affected by frivolous conduct may file a motion 

for an award of court costs, reasonable attorney’s fees, and other reasonable 

expenses incurred in connection with the civil action or appeal.” R.C. 

2323.51(B)(1). R.C. 2323.51(A)(2), which defines frivolous conduct, provides in 

pertinent part: 

(2) “Frivolous conduct” means * * *: 

(a) Conduct of an inmate or other party to a civil action, of an inmate 

who has filed an appeal of the type described in [R.C. 

2323.51(A)(1)(b)], or of the inmate’s or other party’s counsel of 

record that satisfies any of the following: 

(i) It obviously serves merely to harass or maliciously injure 

another party to the civil action or appeal or is for another improper 
Case No. 11-19-09 

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purpose, including, but not limited to, causing unnecessary delay or a 

needless increase in the cost of litigation. 

(ii) It is not warranted under existing law, cannot be supported by a 

good faith argument for an extension, modification, or reversal of 

existing law, or cannot be supported by a good faith argument for the 

establishment of new law. 

(iii) The conduct consists of allegations or other factual contentions 

that have no evidentiary support or, if specifically so identified, are 

not likely to have evidentiary support after a reasonable opportunity 

for further investigation or discovery. 

(iv) The conduct consists of denials or factual contentions that are 

not warranted by the evidence or, if specifically so identified, are not 

reasonably based on a lack of information or belief. 

R.C. 2323.51(A)(2)(a)(i)-(iv). “Frivolous conduct, as contemplated by R.C. 

2323.51(A)(2)(a), is judged under an objective, rather than a subjective, standard * 

* * and must involve egregious conduct.” State ex rel. DiFranco v. S. Euclid, 144 

Ohio St.3d 571, 2015-Ohio-4915, ¶ 15, citing State ex rel. Striker v. Cline, 130 Ohio 

St.3d 214, 2011-Ohio-5350, ¶ 21. “In determining whether a claim itself is frivolous 

under the statute, the test is whether no reasonable lawyer would have brought the 
Case No. 11-19-09 

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action in light of the existing law.” Reddy at ¶ 71, citing Orbit Electronics, Inc. v. 

Helm Instrument Co., Inc., 167 Ohio App.3d 301, 2006-Ohio-2317, ¶ 49 (8th Dist.). 

{¶64} “‘“[N]o single standard of review applies in R.C. 2323.51 cases.”’” 

Id. at ¶ 67, quoting Namenyi v. Tomasello, 2d Dist. Greene No. 2013-CA-75, 2014-

Ohio-4509, ¶ 19, quoting Wiltberger v. Davis, 110 Ohio App.3d 46, 51 (10th 

Dist.1996). “When the question regarding what constitutes frivolous conduct calls 

for a legal determination, such as whether a claim is warranted under existing law, 

an appellate court is to review the frivolous conduct determination de novo, without 

deference to the trial court’s decision.” Id., citing Natl. Check Bur. v. Patel, 2d Dist. 

Montgomery No. 21051, 2005-Ohio-6679, ¶ 10. “‘In contrast, if there is no disputed 

issue of law and the question is factual, we apply an abuse of discretion standard of 

review.’” Id., quoting Riverview Health Inst., L.L.C. v. Kral, 8th Dist. Cuyahoga 

No. 24931, 2012-Ohio-3502, ¶ 33, citing Natl. Check Bur. at ¶ 11. Likewise, the 

ultimate decision whether to award sanctions under R.C. 2323.51 will not be 

reversed absent a showing of an abuse of discretion. DiFranco at ¶ 13, quoting 

State ex rel. Bell v. Madison Cty. Bd. of Commrs., 139 Ohio St.3d 106, 2014-Ohio1564, ¶ 10, citing Striker at ¶ 11. An abuse of discretion suggests the trial court’s 

decision is unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore, 5 

Ohio St.3d 217, 219 (1983). 
Case No. 11-19-09 

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{¶65} In its February 9, 2018 judgment denying the Watsons’ first motion 

for sanctions, the trial court found that U.S. Bank “was justified in the filing of the 

new, albeit nearly identical, complaint in which the previous admissions deemed 

admitted were not an issue.” (Doc. No. 23). Consequently, the trial court concluded 

that U.S. Bank “committed no frivolous conduct” and denied the Watsons’ first 

motion for sanctions. (Id.). Although the trial court did not make any findings of 

fact with respect to its denial of the Watsons’ second motion for sanctions, the 

Watsons’ second motion for sanctions was based on the same res judicata argument 

as its first motion for sanctions as well as arguments relating to supposed defects in 

U.S. Bank’s summary-judgment evidence. (Doc. Nos. 46, 49, 50).

{¶66} In light of our resolution of the Watsons’ first and second assignments 

of error, we conclude that the trial court did not err by holding that U.S. Bank did 

not engage in frivolous conduct. As explained in our discussion of the Watsons’ 

first assignment of error, U.S. Bank is not barred either by claim preclusion or by 

issue preclusion from maintaining the second foreclosure or from litigating issues 

critical to succeeding on its claim. Therefore, we cannot conclude that U.S. Bank’s 

claim is frivolous because existing law supports that the claim could be brought and 

litigated by a reasonable lawyer. Furthermore, in our examination of the Watsons’ 

second assignment of error, we concluded that U.S. Bank supported its motion for 

summary judgment with evidentiary-quality materials, that U.S. Bank demonstrated 
Case No. 11-19-09 

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the absence of any genuine issues of material fact concerning the elements of its 

claim, that the Watsons failed to rebut U.S. Bank’s showing, and that U.S. Bank is 

entitled to judgment as a matter of law. Thus, because we have already necessarily 

rejected the Watsons’ arguments relating to the quality and sufficiency of U.S. 

Bank’s allegations and evidence, we cannot now hold that U.S. Bank conducted this 

litigation in a frivolous manner. In sum, as we agree with the trial court that U.S. 

Bank did not engage in frivolous conduct, we conclude that the trial court did not 

abuse its discretion by denying the Watsons’ motions for sanctions under R.C. 

2323.51. 

{¶67} The Watsons’ third assignment of error is overruled. 

{¶68} Having found no error prejudicial to the appellants herein in the 

particulars assigned and argued, we affirm the judgment of the trial court. 

 Judgment Affirmed 

WILLAMOWSKI and ZIMMERMAN, J.J., concur. 

/jlr