Court Opinion

ID: 4535841
Source: CourtListenerOpinion
Date Created: 2020-05-21 16:12:41.968467+00
Date Added: 2024-06-11T08:45:52.252368
License: Public Domain

[Cite as Search Mgt., L.L.C. v. Fillinger, 2020-Ohio-3036.]

                               COURT OF APPEALS OF OHIO

                              EIGHTH APPELLATE DISTRICT
                                 COUNTY OF CUYAHOGA

SEARCH MANAGEMENT L.L.C.,                               :

                 Plaintiff-Appellant,                   :
                                                                     No. 108901
                 v.                                     :

JUDY FILLINGER,                                         :

                 Defendant-Appellee.                    :

                                JOURNAL ENTRY AND OPINION

                 JUDGMENT: AFFIRMED
                 RELEASED AND JOURNALIZED: May 21, 2020

             Civil Appeal from the Cuyahoga County Court of Common Pleas
                                 Case No. CV-18-902138

                                             Appearances:

                 John Wood, for appellant.

LARRY A. JONES, SR., J.:

        {¶ 1}      Plaintiff-appellant,           Search      Management   L.L.C.   (“Search

Management”), appeals the trial court’s decision granting default judgment on its

complaint for ejectment. Finding no merit to the appeal, we affirm.

        {¶ 2}      In 2017, defendant-appellee, Judy Fillinger (“Fillinger”), signed a ten-

year note in favor of Search Management for $95,000 and executed a mortgage on
a property located on Victory Road in South Euclid, Ohio. The note required interest

payments of $475 per month. Fillinger did not make the payments.

      {¶ 3}    In 2018, Search Management filed a complaint for ejectment.

Fillinger did not answer or otherwise respond and Search Management moved for

default judgment.

      {¶ 4}    In 2019, the trial court granted Search Management’s motion,

finding, in part:

      Fillinger is in default under the terms and conditions of the note and
      * * * owes to Search Management, LLC the sum of $104,975 as of
      October 1, 2018.

      The conditions in the mortgage deed have been broken by reason of
      non-payment * * * As a consequence, plaintiff is entitled to an
      ejectment of the defendant * * * .

      Search Management is entitled to take possession of the mortgaged
      property, receive income from it, and apply the proceeds to the debt,
      restoring the property to Fillinger when the debt is satisfied. * * * If
      plaintiff does not receive rental income from the property, then it
      should apply the fair market value from its possession and use of the
      property to the underlying debt.

      ***

      A writ of possession is granted in favor of Search Management.

(Citations omitted.) Order Granting Plaintiff’s Motion for Default Judgment (Aug.

5, 2019).

      {¶ 5}    It is from this order that Search Management now appeals, raising the

following assignment of error for our review:

      I. It was error for the [court’s] Order to forbid Plaintiff Search
      Management from recording its absolute ownership of the premises
      after the court found there was a default in the condition of the
      mortgage deed, error not to extinguish Defendant Fillinger’s equity of
      redemption, error to order Plaintiff to apply all the rents and profits to
      payment of Fillinger’s debt to Search Management, and error to order
      that the premises be returned to Fillinger upon payment of the
      defaulted debt.

      {¶ 6}    In its sole assignment of error, Search Management contends that the

trial court erred when it issued a writ of possession to the company rather than

granting the company absolute ownership over the Victory Road property.

      {¶ 7}    Search Management contends that because it gained possession of

the property through a writ of ejection, its title to the premises is absolute and it has

no duty to account for rents and profits or to return the premises to Fillinger if she

satisfies the debt. We disagree.

      {¶ 8}    The Ohio Supreme Court has long recognized that upon a mortgagor’s

default, the mortgagee may elect among separate and independent remedies to

collect the debt secured by the mortgage. Deutsche Bank Natl. Trust Co. v. Holden,

147 Ohio St.3d 85, 2016-Ohio-4603, 60 N.E.3d 1243, ¶ 21, citing Carr v. Home

Owners Loan Corp., 148 Ohio St. 533, 76 N.E.2d 389 (1947). A “mortgagee may

seek a personal judgment against the mortgagor to recover the amount due on the

promissory note, without resort to the mortgaged property.” Holden at ¶ 22, citing

State ex rel. Squire v. Pejsa, 148 Ohio St. 1, 72 N.E.2d 374 (1947). The mortgagee

may also

      bring an action to enforce the mortgage, which “is for the exclusive
      benefit of the mortgagee and those claiming under him [or her].” A
      mortgage conveys a conditional property interest to the mortgagee as
      security for a debt * * * and upon default, legal title to the mortgaged
      property passes to the mortgagee as between the mortgagor and
      mortgagee. Because of this superior title, the mortgagee may bring an
      action in ejectment to take possession of the mortgaged property,
      receive the income from it, and apply the proceeds to the debt, restoring
      the property to the mortgagor when the debt is satisfied.

(Citations omitted.) Holden at ¶ 23, quoting Phelps’ Lessee v. Butler, 2 OHIO 224,

226 (1826).

      {¶ 9}   Third, “the mortgagee may bring a foreclosure action to cut off the

mortgagor’s right of redemption, determine the existence and extent of the

mortgage lien, and have the mortgaged property sold for its satisfaction.” Holden at

¶ 24, citing Wilborn v. Bank One Corp., 121 Ohio St.3d 546, 2009-Ohio-306, 906

N.E.2d 396.

      {¶ 10} Thus, upon a mortgagor’s default, the mortgagee has three separate

and independent remedies that it may pursue in an attempt to collect the debt

secured by the mortgage: a personal judgment against the mortgagor to obtain the

amount owing on the promissory note; an action in ejectment based on the

mortgage; and an action in foreclosure based upon the mortgage. United States

Bank Natl. Assn. v. O’Malley, 8th Dist. Cuyahoga No. 108191, 2019-Ohio-5340, ¶ 16,

citing Holden at ¶ 22-24.

      {¶ 11} In this case, mortgagee Search Management chose to file an action in

ejectment.    Search Management did not file a foreclosure action.            Search

Management submitted a proposed judgment entry to the trial court that would

have foreclosed on mortgagor Fillinger’s equity of redemption and allowed the

company to “record its full interest in the property with the County Recorder.” But
the trial court did not use Search Management’s proposed entry, rather, it drafted

its own entry and noted that the remedy of ejectment does not cut off the right to

redemption. By operation, ejectment ‘“does not cut off the right of redemption, and

the mortgagor has time to redeem by action, wherein the rights and equities of the

parties, including the debt secured by the mortgage, the rents and profits, etc., may

all be adjusted by a court of equity.”’ Wells Fargo Bank, N.A. v. Young, 2d Dist.

Darke No. 2009 CA 12, 2011-Ohio-122, ¶ 44, quoting Levin v. Carney, 161 Ohio St.

513, 520, 120 N.E.2d 92 (1954).

      {¶ 12} Therefore, the trial court did not err when it issued a writ of

possession to Search Management rather than granting the company absolute

ownership over the property.

      {¶ 13} The sole assignment of error is overruled.

      {¶ 14} Judgment affirmed.

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

      The court finds there were reasonable grounds for this appeal.

      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.

LARRY A. JONES, SR., JUDGE

EILEEN T. GALLAGHER, A.J., and
KATHLEEN ANN KEOUGH, J., CONCUR