Court Opinion

ID: 4433234
Source: CourtListenerOpinion
Date Created: 2019-08-26 15:09:35.337063+00
Date Added: 2024-06-11T14:24:38.584208
License: Public Domain

[Cite as Tax Ease Ohio L.L.C. v. Miller, 2019-Ohio-3433.]

                                       COURT OF APPEALS
                                  TUSCARAWAS COUNTY, OHIO
                                   FIFTH APPELLATE DISTRICT

 TAX EASE OHIO LLC,                                     JUDGES:
                                                        Hon. W. Scott Gwin, P.J
         Plaintiff-Appellee                             Hon. William B. Hoffman, J.
                                                        Hon. Patricia A. Delaney, J.
 -vs-
                                                        Case No. 2019 AP 01 0006
 RONNIE L. MILLER, et al.,

        Defendants-Appellants                           O P I N IO N

 CHARACTER OF PROCEEDINGS:                              Appeal from the Tuscarawas County
                                                        Court of Common Pleas, Case No. 2018
                                                        CF 02 0194

 JUDGMENT:                                              Vacated and Remanded

 DATE OF JUDGMENT ENTRY:                                August 23, 2019

 APPEARANCES:

 For Plaintiff-Appellee                                 For Defendants-Appellants

 AUSTIN BARNES, III                                     DANIEL A. FRIEDLANDER
 1213 Prospect Avenue, Suite 300                        Weltman, Weinberg & Reis Co., LPA
 Cleveland, Ohio 44115                                  323 West Lakeside Avenue, Suite 200
                                                        Cleveland, Ohio 44113
Tuscarawas County, Case No. 2019 AP 01 0006                                                   2

Hoffman, J.
           {¶1}    Defendant-appellant The Farmers National Bank of Canfield appeals the

December 19, 2018 Judgment Entry entered by the Tuscarawas County Court of

Common Pleas, which denied its Motion for Leave to File Amended Answer and

Complaint. Plaintiff-appellee is Tax Ease Ohio LLC.1

                                   STATEMENT OF THE CASE AND FACTS

           {¶2}    On February 28, 2018, Tax Ease Ohio LLC (“Tax Ease”) filed a complaint

in the Tuscarawas County Court of Common Pleas, naming Ronnie L. and Joyce C. Miller

(“the Millers”), The Farmers National Bank of Canfield as successor by merger to First

National Bank (“Farmers”), Tuscarawas County Treasurer, and the United States

Department of the Treasury, Internal Revenue Service, as defendants. Tax Ease sought

to foreclose on a tax certificate relating to real property at 9334 Strasburg Bolivar Road,

Strasburg, Ohio (“the Property”), which was owned by the Millers. Although the Millers’

loan with Farmers was current at the time of the filing of the complaint, Farmers filed a

protective answer, asserting it held the first lien after the tax certificate and real estate

taxes, to be paid from the proceeds of a sale, in accordance with its priority.

           {¶3}    Tax Ease filed a motion for default judgment against the Millers on April 27,

2018. Via Judgment Entry and Decree of Foreclosure filed May 10, 2018, the trial court

granted default against the Millers. With respect to Farmers and the other lien claimants,

the trial court stated:

1   Tax Ease did not file a reply brief.
Tuscarawas County, Case No. 2019 AP 01 0006                                                  3

             4. The Court finds that Defendants the United States of America

      Department of the Treasury Internal Revenue Service and The Farmers

      National Bank of Canfield successor by merger to First National Bank, claim

      some right, title, interest or lien upon the premises described, as set forth in

      their Answers filed herein, but that any right, title, interest, claim or liens said

      Defendants may have are inferior and subsequent to the lien of [Tax Ease].

      The Court makes no finding at this time as to the right, title, interest or lien

      of said Defendants as set forth in its pleadings, except to note that such

      claim, right, title, interest or lien of said Defendants are hereby ordered

      transferred to the proceeds derived from the sale of said premises, after the

      payment of the costs of the within action, taxes due and payable, and the

      amount found due [Tax Ease], and the same is hereby ordered continued

      until further order.     May 10, 2018 Judgment Entry and Decree of

      Foreclosure.

      {¶4}   On December 6, 2018, Farmers filed a Motion for Leave to File Amended

Answer and Complaint, seeking to file an amended answer and cross-claim to

affirmatively seek a money judgment on its note and foreclose on its mortgage because

the Millers were in default. Farmers noted the trial court had entered judgment in favor

of Tax Ease. Farmers explained the judgment entry did not make a finding relative to

Farmer’s mortgage, but transferred it to the proceeds of the sale of the Property. Tax

Ease has not taken action to cause the Property to be scheduled for sale.
Tuscarawas County, Case No. 2019 AP 01 0006                                               4

       {¶5}   Via Judgment Entry filed December 19, 2018, the trial court denied Farmers’

motion. The trial court found the motion was not timely filed. The trial court further found

final judgment was rendered in the case on May 10, 2018.

       {¶6}   It is from this judgment entry Farmers appeals, raising the following

assignments of error:

              I. A JUDGMENT ENTRY AND DECREE OF FORECLOSURE IS

       NOT A FINAL APPEALABLE ORDER AS TO ISSUES THAT ARE

       SPECIFICALLY RESERVED FOR FURTHER DETERMINATION IN

       LATER PROCEEDINGS.

              II. IN A FORECLOSURE ACTION IT IS AN ABUSE OF

       DISCRETION TO HOLD THAT A PRIOR DECREE OF FORECLOSURE,

       RESERVING FOR FURTHER ORDER AND FINDING AS TO A

       DEFENDANT MORTGAGE HOLDER’S CLAIMS, BARS THE MORTGAGE

       HOLDER FROM SUBSEQUENTLY AMENDING ITS ANSWER TO

       ASSERT A SUBSEQUENT DEFAULT ON ITS MORTGAGE AND TO

       SEEK A DECREE OF FORECLOSURE IN ITS FAVOR.

                                               I, II

       {¶7}   For ease of discussion, we shall address Farmers’ assignments of error

together. In its first assignment of error, Farmers contends the trial court abused its

discretion in denying Farmers’ Motion for Leave to File Amended Answer and Complaint

based upon a finding the May 10, 2018 Judgment Entry and Decree of Foreclosure was
Tuscarawas County, Case No. 2019 AP 01 0006                                              5

a final order. In its second assignment of error, Farmers submits the trial court abused

its discretion in finding the May 10, 2018 Judgment Entry and Decree of Foreclosure

barred Farmers from amending its answer and filing a cross-claim. We agree with both

assertions.

      {¶8}    In CitiMortgage, Inc. v. Roznowski, 139 Ohio St.3d 299, 2014-Ohio-1984,

11 N.E.3d 1140, at ¶ 20, the Ohio Supreme Court addressed whether a judgment decree

in foreclosure, which included, as part of the recoverable damages, amounts advanced

by the mortgagee for inspections, appraisals, property protection, and maintenance, but

did not include the specific amounts of those items, is a final appealable order pursuant

to R.C. 2505.02(B)(1). The Roznowski Court concluded:

              [F]or a judgment decree in foreclosure to constitute a final order, it

      must address the rights of all lienholders and the responsibilities of the

      mortgagor. As detailed by the Seventh District, the judgment entries in

      Walling and PHH were not final orders, because they failed to address the

      rights of various lienholders involved in those cases. In LaSalle and in the

      present case, however, the judgment entries set forth the rights of all

      lienholders. Although the trial courts in LaSalle and the present case did not

      specify the actual amounts due, they did state what the mortgagors would

      be liable for. Each party's rights and responsibilities were fully set forth—all

      that remained was for the trial court to perform the ministerial task of

      calculating the final amounts that would arise during confirmation

      proceedings. Id. at ¶ 20.
Tuscarawas County, Case No. 2019 AP 01 0006                                                   6

       {¶9}    In its May 10, 2018 Judgment Entry and Decree of Foreclosure, the trial

court found:

               The Court finds that Defendants the United States of America

       Department of the Treasury Internal Revenue Service and The Farmers

       National Bank of Canfield successor by merger to First National Bank, claim

       some right, title, interest or lien upon the premises described, as set forth in

       their Answers filed herein, but that any right, title, interest, claim or liens said

       Defendants may have are inferior and subsequent to the lien of [Tax Ease].

       The Court makes no finding at this time as to the right, title, interest or lien

       of said Defendants as set forth in its pleadings, except to note that such

       claim, right, title, interest or lien of said Defendants are hereby ordered

       transferred to the proceeds derived from the sale of said premises, after the

       payment of the costs of the within action, taxes due and payable, and the

       amount found due [Tax Ease], and the same is hereby ordered continued

       until further order.     May 10, 2018 Judgment Entry and Decree of

       Foreclosure at ¶ 4.

       {¶10} We find the May 10, 2018 Judgment Entry and Decree of Foreclosure was

not a final order. The entry fails to address the rights of Farmers. The entry does not

provide Farmers with the ability to seek a judgment against the Millers or proceed with

foreclosure on its mortgage. Additionally, we find because the judgment was not final,

Farmers is not barred from amending its answer and filing its complaint against the Millers
Tuscarawas County, Case No. 2019 AP 01 0006                                              7

on its mortgage and to proceed with foreclosure on that mortgage. Accordingly, we find

the trial court abused its discretion in denying Farmers’ Motion for Leave to File Amended

Answer and Complaint.

       {¶11} In support of its position, Farmers also argued the doctrine of lis pendens

prevented it from filing a separate foreclosure action against the Millers. We find the

doctrine of lis pendens is not applicable to the instant action.

       {¶12} Ohio's lis pendens statute provides: “When a complaint is filed, the action

is pending so as to charge a third person with notice of its pendency. While pending, no

interest can be acquired by third persons in the subject of the action, as against the

plaintiff's title.” R.C. 2703.26. “Lis pendens prevents third parties who claim to have

‘acquired an interest’ in the property, after service and during the pendency of the

foreclosure action, from challenging the trial court's judgment.” Bates v. Postulate

Invests., L.L.C., 176 Ohio App.3d 523, 2008–Ohio–2815, 892 N.E.2d 937, ¶ 16.

       {¶13} Because Farmers’ interest in the Property existed prior to Tax Ease initiating

the foreclosure on the tax certificate, we find lis pendens would not preclude Farmers

from initiating its own action.

       {¶14} Farmers’ first and second assignments of error are sustained.
Tuscarawas County, Case No. 2019 AP 01 0006                                            8

       {¶15} The judgment of the Tuscarawas County Court of Common Pleas is vacated

and the matter remanded for the trial court to allow Farmers to amend its answer and file

its complaint for foreclosure.

By: Hoffman, J.
Gwin, P.J. and
Delaney, J. concur