Court Opinion

ID: 4257980
Source: CourtListenerOpinion
Date Created: 2018-03-23 20:28:27.21702+00
Date Added: 2024-06-11T14:28:16.171100
License: Public Domain

[Cite as Blisswood Village Home Owners Assn. v. Genesis Real Estate Holdings Group, L.L.C.,
2018-Ohio-1080.]

                 Court of Appeals of Ohio
                                  EIGHTH APPELLATE DISTRICT
                                     COUNTY OF CUYAHOGA

                                 JOURNAL ENTRY AND OPINION
                                     Nos. 105312 and 105575

                           BLISSWOOD VILLAGE HOME OWNERS
                                    ASSOCIATION

                                                          PLAINTIFF-APPELLEE

                                                    vs.

                              GENESIS REAL ESTATE HOLDINGS
                                   GROUP, L.L.C., ET AL.

                                                          DEFENDANTS-APPELLANTS

                                       JUDGMENT:
                           DISMISSED IN PART; AFFIRMED IN PART

                                       Civil Appeal from the
                              Cuyahoga County Court of Common Pleas
                                     Case No. CV-15-852869

        BEFORE: Kilbane, P.J., McCormack, J., and E.T. Gallagher, J.

        RELEASED AND JOURNALIZED:                     March 22, 2018
ATTORNEY FOR APPELLANT

Mark Novak
4154 Ardmore Road
South Euclid, Ohio 44121

ATTORNEYS FOR APPELLEE

Steven B. Potter
Jared Klebanow
Dinn, Hochman & Potter, L.L.C.
5910 Landerbrook Drive - Suite 200
Cleveland, Ohio 44124

For Cuyahoga County Treasurer & Cuyahoga County Fiscal Officer

Michael C. O’Malley
Cuyahoga County Prosecutor
BY: Anthony J. Giunta
Assistant County Prosecutor
310 W. Lakeside Avenue - Suite 300
Cleveland, Ohio 44113

MARY EILEEN KILBANE, P.J.:

       {¶1}    In this consolidated appeal, defendant-appellant, Genesis Real Estate Holdings

Group, L.L.C. (“Genesis”), appeals from the trial court’s orders of foreclosure and confirmation

of the sheriff’s sale in this foreclosure action instituted by plaintiff-appellee, Blisswood Village

Home Owners Association (“Blisswood”).           For the reasons set forth below, we dismiss

Genesis’s appeal from the orders of foreclosure and confirmation of the sale as moot and affirm

the trial court’s award of attorney fees to Blisswood.

       {¶2}    In October 2015, Blisswood instituted a foreclosure action against Genesis and

other defendants holding or claiming interests in real property located at 430 Kenwood Drive,
Unit E, in the city of Euclid, Ohio (“the property”). Genesis was record title holder of the

property. The foreclosure complaint sought a decree of foreclosure against the property and also

sought a judgment in the amount $2,900.96, plus interest, for unpaid monthly assessments for

common expenses as well as late fees and other charges, including reasonable attorney fees,

under R.C. 5311.18.

       {¶3}    In October 2016, Blisswood moved for summary judgment. In November 2016,

the trial court granted summary judgment in Blisswood’s favor and entered a decree of

foreclosure. In December 2016, the trial court granted Blisswood’s unopposed motion for

attorney fees under R.C. 5311.18(A)(1)(b) and awarded $5,355.50 in attorney fees to Blisswood.

The trial court further ordered that the attorney fees be paid from the proceeds of the sale. Later

that same month, Genesis filed its appeal from the decree of foreclosure.

       {¶4}    The record reflects that Genesis did not request a stay of the judgment of

foreclosure. In January 2017, the property was sold at sheriff’s sale to Blisswood Village

Reinvestment, L.L.C. (“BVR”). In February 2017, the trial court confirmed the sale, and in

March 2017, the proceeds from the sheriff’s sale were distributed. In March 2017, Genesis

appealed the confirmation of the sale. The record further reflects that Genesis did not seek a

stay of the distribution of the proceeds of the sale.

       {¶5}    That same month, Blisswood moved to dismiss Genesis’s appeal from the order of

foreclosure, relying on several cases from this district for the proposition that Genesis’s appeal is

moot because the property had been sold and the proceeds of the sale distributed. See Provident

Funding Assocs., L.P. v. Turner, 8th Dist. Cuyahoga No. 100153, 2014-Ohio-2529; Wells

Fargo Bank, N.A. v. Cuevas, 8th Dist. Cuyahoga No. 99921, 2014-Ohio-498; Beneficial Ohio,

Inc. v. LaQuatra, 8th Dist. Cuyahoga No. 99860, 2014-Ohio-605; Bank of New York Mellon v.
Adams, 8th Dist. Cuyahoga No. 99399, 2013-Ohio-5572; Third Fed. S. & L. Assn. of Cleveland

v. Rains, 8th Dist. Cuyahoga No. 98592, 2012-Ohio-5708.

        {¶6}      In April 2017, this court granted Blisswood’s motion to dismiss Genesis’s appeal

from the decree of foreclosure. Later that month, Genesis, relying on this court’s decision in

Fannie Mae v. Hicks, 2016-Ohio-8484, 77 N.E.3d 380 (8th Dist.), moved for reconsideration of

the dismissal.       We granted Genesis’s motion for reconsideration.           In June 2017, we

consolidated Genesis’s appeals from the decree of foreclosure and the order confirming the

sheriff’s sale.

        {¶7}      Genesis now raises the following three assignments of error for our review.

                                       Assignment of Error One

        The trial court erred as a matter of law when it granted [Blisswood’s] motion for
        summary judgment in foreclosure because [Genesis] established a genuine issue
        of material fact that the assessments underlying [Blisswood’s] lien were invalid
        enforcement assessments and that [Blisswood] denied [Genesis’s] statutory rights
        to notice and hearing under [R.C. 5311.081(C)] prior to imposing the assessments.

                                       Assignment of Error Two

        The trial court erred as a matter of law when it granted [Blisswood’s] motion for
        summary judgment in foreclosure because [Genesis] established a genuine issue
        of material fact that [Blisswood’s] Board of Trustees was not properly constituted
        according to its declaration and by-laws when it imposed the enforcement
        assessments underlying [Genesis’s] lien.

                                      Assignment of Error Three

        The trial court erred and abused its discretion when it awarded attorney’s fees in
        the amount of $5,355.50 to [Blisswood].

                                               Mootness

        {¶8}      In the first two assignments of error, Genesis argues that the trial court erred in

granting summary judgment in favor of Blisswood and issuing a decree of foreclosure because

Blisswood’s lien was based upon invalid assessments. Genesis contends that Blisswood’s board
of trustees was not properly constituted at the time it imposed the assessments and that

Blisswood failed to comply with the hearing and notice provisions of R.C. 5311.081(C).

       {¶9}    As discussed above, this court dismissed Genesis’s appeal from the decree of

foreclosure and subsequently reconsidered that decision. Before we examine the merits of

Genesis’s assigned errors, we must address Blisswood’s motion to dismiss this appeal. In its

motion for reconsideration, Genesis argued that this court’s holding in Hicks, 2016-Ohio-8484,

77 N.E.3d 380, mandates return of the property to Genesis because BVR was not a good faith,

third-party purchaser of the property. Blisswood maintains that Genesis’s appeal is moot and

that our holding in Hicks is inapplicable to the present matter. We agree with Blisswood.

       {¶10} As discussed above, the property has been sold at sheriff’s sale, and the proceeds of

the sale have been distributed. In Turner, this court noted that R.C. 2329.45, which governs the

reversal of judgments in foreclosure cases, provides a remedy for appellants in foreclosure cases

after the property has been sold. Turner, 8th Dist. Cuyahoga No. 100153, 2014-Ohio-2529, at 

5.

       {¶11} We explained that even when the property itself is no longer recoverable, R.C.

2329.45 provides an alternative remedy in the form of restitution. Id. at  6. We noted,

however, that R.C. 2329.45 only applies when the appealing party sought and obtained a stay of

the distribution of the proceeds. Id. at  6, citing Bankers Trust Co. of California, N.A. v. Tutin,

9th Dist. Summit No. 24329, 2009-Ohio-1333, ¶ 11; see also Cuevas, 8th Dist. Cuyahoga No.

99921, 2014-Ohio-498; LaQuatra, 8th Dist. Cuyahoga No. 99860, 2014-Ohio-605; Adams, 8th

Dist. Cuyahoga No. 99399, 2013-Ohio-5572; Rains,               8th Dist. Cuyahoga No. 98592,

2012-Ohio-5708.     Where a defendant in a foreclosure action fails to obtain a stay of the

distribution of the proceeds, R.C. 2329.45 does not apply and any appeal therefrom is moot
because “the matter has been extinguished through satisfaction of the judgment, the individual

subject matter of the case is no longer under the control of the court and the court cannot afford

relief to the parties to the action.” Tutin at ¶ 16.

        {¶12} Here, Genesis never moved to stay the foreclosure proceedings, nor did it move for

a stay of the distribution of the proceeds from the sale. The record reveals that the property has

been sold and the proceeds of the sale distributed. Thus, there is no relief that can be afforded to

Genesis.

                                        Fannie Mae v. Hicks

        {¶13} Genesis argues that, despite its failure to seek a stay of the proceedings, its appeal

is not moot because, under Hicks, 2016-Ohio-8484, 77 N.E.3d 380, BVR is not entitled to the

statutory protections of a third-party purchaser because it is not a “stranger” to the underlying

litigation. In Hicks, this court explained the unique facts and procedural history as follows:

        The facts of this case involve a prior appeal, Fannie Mae v. Hicks,
        2015-Ohio-1955, 35 N.E.3d 37 (8th Dist.). In that case, Hicks executed loan
        documents (a note and mortgage) with All American Home Lending, Inc. in 2004
        to finance the purchase of a home in the city of Shaker Heights. All American
        later assigned the mortgage to Chase Manhattan Mortgage Corporation. When
        Hicks failed to make payments on the note, Chase Manhattan accelerated the loan
        and assigned the mortgage to Fannie Mae.

        Fannie Mae brought a foreclosure action against Hicks. In the complaint, Fannie
        Mae alleged that it was assigned the subject mortgage and was a “person entitled
        to enforce the note.” Fannie Mae attached copies of the note and mortgage to the
        complaint, along with an allonge containing a special endorsement of the note
        from Chase Manhattan to Fannie Mae. During the course of litigation, Fannie
        Mae amended its complaint twice to reflect the fact that the original note executed
        by Hicks in favor of All American was lost by Chase Manhattan before it was
        purchased by Fannie Mae. Despite this irregularity, Fannie Mae moved for
        summary judgment in the foreclosure action. In its motion for summary
        judgment, Fannie Mae conceded that it was not entitled to enforce the lost note
        under R.C. 1308.38, but nevertheless argued that it was entitled to foreclose on
        the property by virtue of the mortgage assignment alone. Hicks filed a motion for
        summary judgment arguing that she was entitled to judgment as a matter of law
        because Fannie Mae conceded it could not enforce the note and the ability to
enforce the note is a prerequisite to establishing one’s right to foreclose. The trial
court granted Fannie Mae’s motion and denied Hicks’s motion. Hicks appealed.

On appeal, this court concluded that the assignment of the mortgage alone was
insufficient to sustain an action in foreclosure and that Fannie Mae must also be a
person entitled to enforce the note in order to foreclose on the property. The
panel of this court further concluded that Chase Manhattan retained authority to
enforce the note as the last party in possession of the note before it was lost. The
grant of summary judgment in favor of Fannie Mae was reversed, and the case
remanded to the trial court with instructions to enter summary judgment in favor
of Hicks.

While the resolution of the appeal was pending in this court, the trial court
proceeded with the foreclosure sale. In December 2014, Fannie Mae purchased
the property for a $110,000 credit bid and the sale was confirmed. Hicks neither
requested a stay of the confirmation proceedings nor appealed the confirmation
order to this court. However, Hicks did move the trial court for a stay of the
distribution of the sale proceeds pending our decision on the foreclosure action.
The court denied the motion, and Hicks did not seek any further stays. This court
issued its decision in May 2015. One week after the decision, Fannie Mae was
issued the deed to the property. The deed was recorded on June 12, 2015.

Following the release of this court’s decision, Hicks filed a proposed judgment
entry with the trial court that sought to have the court order Fannie Mae to pay her
restitution in the amount of $110,000, the foreclosure purchase price of the
property, pursuant to R.C. 2329.45, and dismiss the foreclosure action with
prejudice. Fannie Mae opposed the proposed order and asked the court to vacate
the confirmation of sale and deed pursuant to Civ.R. 60(B)(4), which allows a
court to vacate a judgment when “the judgment has been satisfied, released or
discharged, or a prior judgment upon which it is based has been reversed or
otherwise vacated, or it is no longer equitable that the judgment should have
prospective application.” In its Civ.R. 60(B) motion for relief from judgment,
Fannie Mae emphasized that the balance of equities required the court to vacate
the confirmation of sale so that Fannie Mae can return title of the property to
Hicks, rather than order restitution in the amount of the purchase price, because
the latter remedy would result in a windfall to Hicks. Additionally, Fannie Mae
argued that an order of restitution was improper under R.C. 2329.45 because
Hicks failed to meet the requirements of the statute that, according to Fannie Mae,
requires that the property be unrecoverable and that Hicks had previously obtained
a stay of the distribution of proceeds.

Hicks opposed Fannie Mae’s motion for relief from judgment. Her opposition

brief argued that the plain language of R.C. 2325.03 and 2329.45 prevents Fannie

Mae from returning title, and that the correct remedy in situations where property
       is sold pending appeal and the judgment is reversed is to order restitution.

Hicks, 2016-Ohio-8484, 77 N.E.3d 380, at ¶ 2-7.

       {¶14} In Hicks, we found that R.C. 2325.03 and 2329.45 only apply to third-party

purchasers and not in situations where the foreclosing plaintiff purchases the property. Id. at 

13. We further found that the trial court erred by not vacating the foreclosure sale and ordering

Fannie Mae to pay Hicks restitution under R.C. 2329.45. Id. at  19. We remanded to the trial

court with instructions to “vacate the confirmation of sale, order the deed to the property be

returned to Hicks, and enter judgment in favor of Hicks on the foreclosure action, pursuant to this

court’s order in [the prior appeal].” Id.

       {¶15} Hicks is distinguishable from the instant case. Most notably, in the timing of each

appeal and the status of the purchaser of each of the subject properties. We note that at the time

of our decision in Hicks’s first appeal, the sale of the property to the foreclosing plaintiff, Fannie

Mae, had been confirmed, but the proceeds of the sale had not yet been distributed. Hicks at  5.

       {¶16} In the instant case, Genesis never moved to stay the foreclosure proceedings nor

did it move to stay the distribution of the proceeds from the sale prior to the order of

confirmation. The property has been sold, the confirmation order has been carried out, and there

exists no relief that can be afforded to Genesis. Moreover, the purchaser of the property, BVR,

is not a party to this matter. Genesis’s contention that BVR is a “shell company” controlled by

Blisswood is not founded in the record.

       {¶17} Based on the foregoing, we find that there is no longer any effectual relief available

to Genesis related to the foreclosure proceedings and confirmation of the sale. Blisswood’s

motion to dismiss the appeal is granted. Accordingly, we dismiss the first two assignments of

error as moot.
                                          Attorney Fees

       {¶18} In the third assignment of error, Genesis argues that the trial court abused its

discretion in awarding $5,355.50 in attorney fees to Blisswood.         The trial court awarded

Blisswood its attorney fees under R.C. 5311.18(A)(1), which states in pertinent part:

       (1) Unless otherwise provided by the declaration or the bylaws, the unit the unit
       owners association has a lien upon the estate or interest of the owner in any unit
       and the appurtenant undivided interest in the common elements for the payment of
       any of the following expenses that are chargeable against the unit and that remain
       unpaid for ten days after any portion has become due and payable:

       (a) The portion of the common expenses chargeable against the unit;

       (b) * * * [A]ttorney’s fees * * * the association incurs if authorized by the
       declaration, the bylaws, or the rules of the unit owners association and if
       chargeable against the unit.

       {¶19} In its complaint, Blisswood asserted that Blisswood Village’s declaration provides

that Blisswood is entitled to its attorney fees expended for collection efforts of unpaid

assessments. Genesis does not dispute that Blisswood is entitled to its attorney fees under R.C.

5311.18(A)(1), but argues, rather, that Blisswood did not present any independent evidence

supporting the reasonableness of the attorney fees.

       {¶20} In support of the motion for attorney fees, Blisswood’s attorney submitted an

affidavit attesting to the fees charged by his firm and attached a detailed billing statement for

work performed. Blisswood also submitted the affidavit of Attorney Eric Hoffman. Attorney

Hoffman attested that the rates charged by the firm and the total fee amount of $5,355.50 “for a

residential foreclosure with discovery issues” were “reasonable and consistent with the rates

charged by lawyers with comparable experience in Cuyahoga County[.]”

       {¶21} This court has held that “‘where a trial court is empowered to award attorney fees

by statute, the amount of such fees is within the sound discretion of the trial court. Unless the
amount of fees determined is so high or so low as to shock the conscience, an appellate court will

not interfere.’” Acacia on the Green Condominium Assn. v. Gottlieb, 8th Dist. Cuyahoga No.

92145, 2009-Ohio-4878, ¶ 52, quoting Bittner v. Tri-County Toyota, Inc., 58 Ohio St. 3d 143,

146, 569 N.E.2d 464 (1991). “The Ohio Supreme Court has determined that the trial court,

having been present through the proceedings, is in the best position to make a determination on

attorney fees.” Id., citing Bittner.

       {¶22} We do not find that the award of $5,355.50 in attorney fees in the present case “is

so high * * * as to shock the conscience.” We further find that Blisswood presented sufficient

evidence in the form of affidavits from its counsel and a local solo practitioner supporting the

reasonableness of the requested attorney fees. Accordingly, the trial court did not abuse its

discretion in awarding this amount. The third assignment of error is overruled.

       {¶23} The consolidated appeal is hereby dismissed in part and affirmed in part.

       It is ordered that appellee recover of appellant costs herein taxed.

       It is ordered that a special mandate issue out of this court directing 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.

MARY EILEEN KILBANE, PRESIDING JUDGE

TIM McCORMACK, J., and
EILEEN T. GALLAGHER, J., CONCUR