Court Opinion

ID: 4322868
Source: CourtListenerOpinion
Date Created: 2018-10-19 15:29:43.272271+00
Date Added: 2024-06-11T14:46:09.529346
License: Public Domain

[Cite as CitiMortgage, Inc. v. Stanley, 2018-Ohio-4229.]

                             IN THE COURT OF APPEALS OF OHIO
                                SECOND APPELLATE DISTRICT
                                      GREENE COUNTY

 CITIMORTGAGE, INC.                                        :
                                                           :
         Plaintiff-Appellee                                :   Appellate Case No. 2018-CA-13
                                                           :
 v.                                                        :   Trial Court Case No. 2015-CV-0256
                                                           :
 SHAWN STANLEY, et al.                                     :   (Civil Appeal from
                                                           :   Common Pleas Court)
         Defendants-Appellants                             :
                                                           :

                                               ...........

                                               OPINION

                            Rendered on the 19th day of October, 2018.

                                               ...........

KARA A. CZANIK, Atty. Reg. No. 0075165, 7759 University Drive, Suite A, West Chester,
Ohio 45069
      Attorney for Plaintiff-Appellee

BRIAN D. FLICK, Atty. Reg. No. 0081605, MARC E. DANN, Atty. Reg. No. 0039425 and
EMILY WHITE, Atty. Reg. No. 0085662, P.O. Box 6031040, Cleveland, Ohio 44103
     Attorneys for Defendants-Appellants

                                              .............

TUCKER, J.
                                                                                         -2-

       {¶ 1} Defendants-appellants, Shawn and Rebecca Stanley, appeal from the trial

court’s judgment of March 2, 2018, in which the court overruled their motion for relief from

its earlier entry of a foreclosure decree in favor of Plaintiff-appellee, CitiMortgage, Inc.

Raising a single assignment of error, Appellants argue that the trial court abused its

discretion by overruling their motion without holding an evidentiary hearing. We find that

the trial court did not abuse its discretion, and we therefore affirm the judgment.

                            I. Facts and Procedural History

       {¶ 2} Appellee filed a complaint in rem on April 9, 2015, seeking to foreclose on

Appellants’ residential real property in Jamestown. The complaint named Appellants

and four other parties as defendants: Ameristate Bancorp, Inc.; the Greene County

Treasurer; Shawnee Hills Property Owners Association, Inc. (“Shawnee Hills”); and the

State of Ohio Department of Taxation. Appellants were served with summonses and

copies of the complaint but did not file an answer or otherwise respond.1 Ameristate

Bancorp, Inc. was served by publication, though it likewise did not respond to the

complaint. The Greene County Treasurer filed an answer on April 16, 2016, asserting a

lien for unpaid real estate taxes, and Shawnee Hills filed an answer on May 11, 2015,

with which it included cross-claims against Appellants for foreclosure and recovery of

unpaid lot assessments. The State of Ohio Department of Taxation disclaimed any

interest.

1The trial court’s docket reflects that Shawn Stanley accepted service by certified mail,
on his own behalf and on behalf of Rebecca Stanley, on April 11, 2015, and that Rebecca
Stanley accepted personal service, on her own behalf and on behalf of Shawn Stanley,
on April 13, 2015.
                                                                                        -3-

       {¶ 3} On August 27, 2015, Appellee moved for default judgment against Appellants

and Ameristate Bancorp, Inc. The trial court sustained Appellee’s motion in a judgment

entry filed on September 17, 2015.       In its judgment entry, the court found that all

necessary parties had been served; that Appellants and Ameristate Bancorp, Inc. had

failed to answer and were in default; that the Greene County Treasurer had “a valid and

subsisting first lien” against Appellants’ property for “accrued taxes, assessments and

penalties” in an amount that was “unascertainable at [that] time”; that Appellee was

entitled to foreclose on the property and to recover “the sum of $147,655.62, plus interest

at 6.00% per annum from June 1, 2010,” along with advances made “for taxes, insurance

and property protection” in an amount that would be determined after confirmation of sale;

that Shawn Stanley had been relieved of personal liability to Appellee through a Chapter

7 bankruptcy proceeding;2 and that “there was no just reason for delay as to [Appellee]’s

claim.” The court made “no finding” regarding the validity of Shawnee Hills’s cross-

claims, “except to note that such claim[s]” were “inferior and subsequent” to Appellee’s

lien, and it “ordered [the cross-claim for unpaid assessments to be] transferred to the

proceeds derived from the sale” of Appellants’ property.

       {¶ 4} Shawnee Hills dismissed its cross-claim for foreclosure on October 7, 2015,

and moved for default judgment on its cross-claim for unpaid lot assessments. The trial

court sustained the motion in a judgment entry filed on November 10, 2015, finding that

Shawnee Hills was entitled to recover $4,401.00, plus interest, costs and attorney’s fees.

       {¶ 5} On March 15, 2016, Appellants, appearing in the case for the first time, filed

2 Shawn Stanley was the sole borrower named in the promissory note secured by the
mortgage on Appellants’ property, although both of the appellants executed the mortgage
as “borrowers.” Compl. ¶ 1-2 and Exs. A-B.
                                                                                              -4-

a motion for relief from judgment under Civ.R. 60(B), arguing that they had not answered

or otherwise responded to Appellee’s complaint because they “were led to believe that

they were working on a loan modification with [Appellee] in conjunction with a

representative [of] the [United States Department of] V[eterans] A[ffairs],” which had

guaranteed their loan. Defs.’ Mot. to Vacate Judgment Entry 1, Mar. 15, 2016; see

Compl. Exs. A-B. Before the trial court entered a decision, however, the parties reached

an agreement whereby Appellants withdrew their motion, and Appellee cancelled the

pending sheriff’s sale of Appellants’ property.

       {¶ 6} Appellants filed a second, substantially similar motion for relief from judgment

on September 13, 2016. The trial court referred the case to mediation on December 7,

2016, without ruling on the motion. Mediation continued for roughly 14 months but did

not yield a settlement.

       {¶ 7} On March 2, 2018, the trial court overruled Appellants’ motion. Appellants

timely filed their notice of appeal on April 2, 2018.

                                         II. Analysis

       {¶ 8} Initially, we must determine whether we have jurisdiction over this appeal.

We entered an order sua sponte on May 2, 2018, indicating that we had “identified an

issue potentially affecting the finality” of the trial court’s decision on Appellants’ motion for

relief from judgment. Noting that “[d]ecisions overruling Civ.R. 60(B) motions are * * *

final,” appealable orders “only where the underlying judgments are also final,” appealable

orders, we questioned whether the trial court’s underlying judgment entry of September

17, 2015, qualifies as final and appealable because, in that entry, the court “fail[ed] to

[establish] the amount of the lien held by Shawnee Hills.” Appellants argue, on this
                                                                                            -5-

basis, that we lack jurisdiction.3 Appellee takes the opposite position.

        {¶ 9} We have held previously that a judgment entry ordering a foreclosure sale is

not a final, appealable order unless, among other things, it determines the priority of all

liens against the property and the corresponding amounts due the lienholders. See, e.g.,

Farmers State Bank v. Sponaugle, 2d Dist. Darke No. 16 CA 00002 (Apr. 18, 2016);

Citizens Natl. Bank of Southwestern Ohio v. Harrison, 2d Dist. Montgomery No. 26498

(Dec. 3, 2015). Here, in its judgment entry of September 17, 2015, the trial court did not

rule on the validity of Shawnee Hills’s lien for unpaid lot assessments or fix the amount

due, but it did determine that the lien would be “inferior and subsequent” to Appellee’s

lien.

        {¶ 10} A foreclosure decree may, however, constitute a final, appealable order

even if it leaves certain issues unresolved.         For example, “a judgment decree in

foreclosure that allows [a mortgagee to recover] unspecified amounts advanced * * * for

inspections, appraisals, property protection, and maintenance but does not include

specific itemization of those amounts is [nevertheless] a final, appealable order.”

CitiMortgage, Inc. v. Roznowski, 139 Ohio St.3d 299, 2014-Ohio-1984, 11 N.E.3d 1140,

¶ 30. More generally, a foreclosure decree may be deemed a final, appealable order if

“all that remains is mathematics, with the court [fixing the] final amounts due [the

claimants] after the property has been sold.” See id. at ¶ 25.

        {¶ 11} Although the trial court did not confirm the validity of Shawnee Hills’s lien in

its judgment entry of September 17, 2015, or specify the amount due on the lien, the court

resolved these issues in its judgment entry of November 10, 2015. Thus, at the time

3   Appellants presented the same argument in their motions for relief from judgment.
                                                                                          -6-

Appellants filed their notice of appeal, the trial court had effectively “ ‘dispose[d] of the

whole merits of the [case, leaving] nothing [else to be] determin[ed],’ ” with the exception

of the “ministerial task of calculating the final amounts” due the claimants during

proceedings to confirm the foreclosure sale. See Roznowski at ¶ 20 and 43; Natl. City

Commercial Capital Corp. v. AAAA at Your Serv., Inc., 114 Ohio St.3d 82, 2007-Ohio-

2942, 868 N.E.2d 663, ¶ 7, quoting Hamilton Cty. Bd. of Mental Retardation & Dev.

Disabilities v. Professionals Guild of Ohio, 46 Ohio St.3d 147, 153, 545 N.E.2d 1260

(1989). We hold, therefore, that under the specific circumstances of this case, the trial

court’s judgment entry of November 10, 2015, was a final, appealable order implicitly

incorporating the rulings it made in its earlier judgment entry of September 17, 2015.

See Dibert v. Carpenter, 2017-Ohio-689, 85 N.E.3d 419, ¶ 49 (2d Dist.), citing Lingo v.

Ohio Cent. RR., Inc. v. Norfolk S. Ry., 10th Dist. Franklin No. 05AP-206, 2006-Ohio-2268,

¶ 17 (noting that when a court enters its final judgment in a case, “all interlocutory orders

are merged into [that] judgment”). Consequently, the trial court’s judgment of March 2,

2018, was likewise a final and appealable order, and we find accordingly that we have

jurisdiction over the instant appeal.

       {¶ 12} For their single assignment of error, Appellants contend that:

              THE TRIAL COURT ABUSED ITS DISCRETION BY DENYING

       APPELLANT’S       [SIC] MOTION FOR RELIEF               FROM JUDGMENT

       WITHOUT HOLDING AN EVIDENTIARY HEARING.

       {¶ 13} In its judgment of March 2, 2018, the trial court found that Appellants’

“neglect in failing to answer [Appellee]’s complaint [was] not excusable” and overruled

their motion for relief under Civ.R. 60(B) as a result. The court did not hold a hearing on
                                                                                         -7-

the motion before entering judgment.         See Appellants’ Br. 9; Appellee’s Br. 10.

Appellants argue that the trial court abused its discretion by ruling on the motion without

holding a hearing because it thereby “missed key[,] operative facts that clearly

demonstrate excusable neglect under existing Ohio law.”             Appellants’ Br. 9-10.

Specifically, Appellants refer to their reliance on statements made by a representative of

the United States Department of Veterans Affairs to the effect “that they could pursue

foreclosure prevention options outside of court for up to [one] year before they would face

a foreclosure sale.” Appellants’ Br. 11.

       {¶ 14} To prevail on a motion for relief from judgment under Civ.R. 60(B), the

moving parties must demonstrate: first, that they have “a meritorious defense or claim to

present if relief is granted”; second, that they are “entitled to relief under one of the

grounds stated in Civ.R. 60(B)(1) through (5)”; and third, that their “motion is made within

a reasonable time, and, where the grounds of relief are Civ.R. 60(B)(1), (2) or (3), not

more than one year after the judgment, order or proceeding was entered or taken.” GTE

Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St. 2d 146, 150-151, 351 N.E.2d

113 (1976); Fifth Third Bank v. Dayton Lodge Ltd. Liab. Co., 2d Dist. Montgomery No.

24843, 2012-Ohio-3387, ¶ 20 [hereinafter Dayton Lodge], citing GTE Automatic at

paragraph two of the syllabus. All “three [of the] elements must be established, and ‘the

test is not fulfilled if any one of the requirements is not met.’ ” Dayton Lodge at ¶ 20,

quoting Strack v. Pelton, 70 Ohio St.3d 172, 174, 637 N.E.2d 914 (1994). On appeal, a

trial court’s ruling on a motion under Civ.R. 60(B) is reviewed for abuse of discretion.

Deutsche Bank Natl. Trust Co. v. Jones, 2d Dist. Montgomery No. 27936, 2018-Ohio-

3286, ¶ 18, citing Griffey v. Rajan, 33 Ohio St.3d 75, 77, 514 N.E.2d 1122 (1987).
                                                                                        -8-

      {¶ 15} Appellants argue that the trial court should have found that they were

entitled to relief pursuant to Civ.R. 60(B)(1), which allows a party to be relieved from a

final judgment on the basis of “mistake, inadvertence, surprise or excusable neglect,”

because they were “inexperienced [with] litigation” and “reasonably, but mistakenly,”

relied on the advice of the Department of Veterans Affairs. Appellants’ Br. 11-12. Yet,

parties “involved in litigation” are responsible for keeping themselves “informed of the

status of the case,” and Appellants do not deny that they were served with summonses

and copies of Appellee’s complaint, meaning that they were aware of the foreclosure

action against them. PHH Mtge. Corp. v. Northrup, 4th Dist. Pickaway No. 11CA6, 2011-

Ohio-6814, ¶ 8 [hereinafter Northrup]. Furthermore, Appellants’ belief that they were not

required to answer or otherwise respond to the complaint because they were attempting

to negotiate a loan modification “does not amount to excusable neglect under Civ.R.

60(B)(1).” PNC Mtge. v. Oyortey, 5th Dist. Delaware No. 11 CAE 10 0093, 2012-Ohio-

3237, ¶ 34; see also Northrup at ¶ 8 and 22.

      {¶ 16} Finally, a “party who files a Civ.R. 60(B) motion for relief from judgment is

not automatically entitled to a hearing on the motion.” Northrup at ¶ 28. Instead, “to

demonstrate [an] entitle[ment] to a hearing,” the moving party “must allege operative facts

that would warrant relief under” the rule. Id. Appellants presented essentially the same

argument for excusable neglect to the trial court and submitted evidence documenting

the progress of their attempts to negotiate a loan modification. The trial court cited this

evidence repeatedly in its judgment of March 2, 2018, but concluded that none of the

evidence “demonstrate[d] that the [department] or [Appellee] intentionally mis[led]

[Appellants] into not filing an answer” to the complaint. Absent evidence of intentionally
                                                                                         -9-

misleading conduct on the part of Appellee, the trial court found that Appellants had simply

chosen to “ignore the litigation until months after [the entry of default] judgment.” Given

that Appellants’ mistaken belief that they were not required to file an answer during the

pendency of negotiations for a loan modification did not, of itself, excuse their failure to

respond to the complaint, a hearing was not warranted either by the allegations

Appellants set forth in their motion, or by the evidence they submitted in support.

Appellants’ assignment of error is overruled.

                                     III. Conclusion

       {¶ 17} We find that the trial court did not abuse its discretion by overruling

Appellants’ motion for relief from judgment. Appellants did not demonstrate that they

failed to answer or otherwise respond to Appellee’s complaint as the result of excusable

neglect for purposes of Civ.R. 60(B)(1), nor did they allege operative facts warranting a

hearing on their motion. Therefore, the trial court’s judgment entry of March 2, 2018, is

affirmed.

                                     .............

HALL, J., concurs.

FROELICH, J., concurring:

       {¶ 18} I do not believe that “excusable neglect” requires a determination that the

Appellants were intentionally misled by the Appellee or a third party. The focus should

be on whether the Appellants’ reliance on the representations of another was reasonable

under all the circumstances – and therefore excusable.

       {¶ 19} Here, the VA advised the Appellants that they had up to 360 days to work

with the servicer “up to the foreclosure sale date, if one is eventually set.” There was no
                                                                                        -10-

representation that the “foreclosure prevention options” would, for a specific period of

time, prevent the filing of a foreclosure complaint and that Appellants could thereby avoid

a foreclosure judgment. Rather, an underlying premise of the VA’s statements was that

a foreclosure action may be filed. The VA informed Appellants that they could pursue

foreclosure prevention options for a period of time before the property would be sold

because of a foreclosure judgment.

       {¶ 20} Given the complicated nature of foreclosure actions, those unfamiliar with

the foreclosure process may not fully appreciate the distinction between negotiating to

avoid a foreclosure action and negotiating until a foreclosure sale. Nevertheless, under

the unique circumstances of this case, the trial court did not abuse its discretion in

determining that Appellants’ failure to respond to the foreclosure action based on the VA’s

statements was not excusable neglect.

Copies sent to:

Kara A. Czanik
Brian D. Flick
Marc E. Dann
Emily White
Ameristate Bancorp, Inc.
Greene County Treasurer
Ohio Department of Taxation
Shawnee Hills Property Owners Association, Inc.
Hon. Stephen Wolaver