Court Opinion

ID: 4099463
Source: CourtListenerOpinion
Date Created: 2016-11-18 04:56:54.227832+00
Date Added: 2024-06-11T13:42:44.605998
License: Public Domain

[Cite as U.S. Bank Natl. Assn. v. Lavelle, 2016-Ohio-7783.]

                 Court of Appeals of Ohio
                                EIGHTH APPELLATE DISTRICT
                                   COUNTY OF CUYAHOGA

                               JOURNAL ENTRY AND OPINION
                                       No. 104234

                 U.S. BANK NATIONAL ASSOCIATION,
                          AS TRUSTEE ETC.
                                                              PLAINTIFF-APPELLEE

                                                      vs.

                           MARY L. LAVELLE, ET AL.
                                                              DEFENDANTS-APPELLANTS

                                            JUDGMENT:
                                             AFFIRMED

                                      Civil Appeal from the
                             Cuyahoga County Court of Common Pleas
                                    Case No. CV-13-800578

        BEFORE: E.T. Gallagher, J., Jones, A.J., and S. Gallagher, J.

        RELEASED AND JOURNALIZED: November 17, 2016
ATTORNEYS FOR APPELLANTS

Scott D. White
Frances F. Allington
21300 Lorain Road, Suite 108
Fairview Park, Ohio 44126

ATTORNEY FOR APPELLEES

Kimberly Y. Smith Rivera
McGlinchey Stafford, P.L.L.C.
25550 Chagrin Boulevard, Suite 406
Cleveland, Ohio 44122-4640
EILEEN T. GALLAGHER, J.:

      {¶1} Defendants-appellants, Mary Lavelle (“Mary”) and the estate of Daniel J.

Lavelle (“Daniel”), appeal a judgment in foreclosure granted in favor of

plaintiff-appellee, U.S. Bank National Association (“U.S. Bank”). Mary raises two

assignments of error:

      1. The trial court erred in finding that the mortgage modification in this
      case was a new agreement, such that the double dismissal rule of Civ.R.
      41(A)(1)(a) did not apply.

      2. The trial court erred in granting appellee summary judgment, as the
      history of the appellee’s three prior cases gives rise to questions of fact.

      {¶2} We find no merit to the appeal and affirm.

                           I. Facts and Procedural History

      {¶3} In January 2006, Daniel, husband of Mary, executed a promissory note in

favor of Ownit Mortgage Solutions, Inc. (“Ownit”) in the amount of $199,500. As

security for the note, Daniel and Mary executed a mortgage to Ownit for property located

on Fairfax Lane, North Olmsted, Ohio. The note was subsequently indorsed to LaSalle

Bank National Association (“LaSalle”), as trustee for Ownit Mortgage Loan Trust,

Mortgage Loan Asset-Backed Certificates, Series, 2006-3.

      {¶4} Daniel defaulted on the note. Consequently, LaSalle Bank accelerated the

debt and brought a foreclosure action against Mary and Daniel, alleging an outstanding

principal balance in the amount of $198,722.20, plus interest at a rate of 8.25 percent per

annum from August 1, 2006. While the complaint was pending, Daniel and LaSalle
entered into a loan modification agreement that amended the note by agreeing to a new

principal amount of $224,052.95 and a reduced interest rate of eight percent per annum.

Having reached a loan modification agreement, LaSalle Bank voluntarily dismissed its

foreclosure complaint without prejudice pursuant to Civ.R. 41(A)(1).             The loan

modification was recorded in the Cuyahoga County public records as Instrument No.

200809040243.

      {¶5} In April 2008, MERS, as nominee for Ownit, executed an assignment of the

mortgage to LaSalle Bank. Daniel subsequently passed away, and LaSalle Bank later

filed a second complaint in foreclosure alleging that Daniel defaulted on terms of the loan

modification agreement with an outstanding principal sum of $223,705.87, plus interest at

a rate of eight percent per annum from November 1, 2007. LaSalle voluntarily dismissed

its complaint without prejudice pursuant to Civ.R. 41(A)(1).

      {¶6} U.S. Bank became holder of the note by virtue of an allonge dated

May 31, 2012. As previously stated, the note was specially indorsed to LaSalle Bank, as

Trustee for Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates,

Series 2006-3.   The note was later indorsed to U.S. Bank National Association as

successor trustee to Bank of America, National Association by merger to LaSalle Bank

National Association.

      {¶7} U.S. Bank filed this third action against Mary and Daniel’s estate in January

2013, once again alleging default in the principal sum of $223,705.87, plus interest at

eight percent per annum from November 1, 2007. Mary filed a motion for summary
judgment, arguing U.S. Bank’s claims were barred by the “double dismissal” rule set

forth in Civ.R. 41(A)(1). U.S. Bank subsequently filed its own motion for summary

judgment, arguing it was entitled to judgment on its complaint because (1) it was the

holder of the note, (2) it was the assignee of the mortgage, and (3) Daniel was in default.

Mary opposed U.S. Bank’s motion, again arguing that its foreclosure complaint was

barred by the double dismissal rule. Mary never challenged the validity of the parties’

modification agreement.

      {¶8} The trial court denied Mary’s motion for summary judgment but granted U.S.

Bank’s motion and rendered a judgment in foreclosure in favor of U.S. Bank. Mary

appealed the denial of her motion for summary judgment and the order of foreclosure in

favor of U.S. Bank. This court reversed the trial court’s judgment on the grounds that

U.S. Bank submitted two inconsistent notes.        See U.S. Bank v. Lavelle, 8th Dist.

Cuyahoga No. 101729, 2015-Ohio-1307.

      {¶9} On remand, U.S. Bank filed a second motion for summary judgment and

provided an explanation for the apparently inconsistent notes. U.S. Bank showed that

some writings were made on a copy of the note but not on the original note. U.S. Bank

also demonstrated that it was in possession of the original note at the time it filed its

complaint.   Based on this evidence, the trial court granted U.S. Bank’s motion for

summary judgment. Mary now appeals the order granting foreclosure to U.S. Bank.

                                 II. Law and Analysis
      {¶10} In the first assignment of error, Mary argues the trial court erred in finding

that the mortgage modification was a new agreement such that the double dismissal rule

of Civ.R. 41(A)(1) did not apply. In the second assignment of error, Mary argues the

trial court erred in granting U.S. Bank’s motion for summary judgment because the

history of three prior cases raises genuine issues of material fact. We discuss these

assigned errors together because they both relate to whether the double dismissal rule

precluded a judgment in foreclosure in favor of U.S. Bank.

                                A. Standard of Review

      {¶11} We review an appeal from summary judgment de novo. Grafton v. Ohio

Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). The party moving for

summary judgment bears the burden of demonstrating the absence of a genuine issue of

material fact as to the essential element of the case with evidence of the type listed in

Civ.R. 56(C). Dresher v. Burt, 75 Ohio St.3d 280, 292, 662 N.E.2d 264 (1996). Once

the moving party demonstrates entitlement to summary judgment, the burden shifts to the

nonmoving party to produce evidence related to any issue on which the party bears the

burden of production at trial. Civ.R. 56(E). Summary judgment is appropriate when,

after construing the evidence in a light most favorable to the party against whom the

motion is made, reasonable minds can only reach a conclusion that is adverse to the

nonmoving party. Zivich v. Mentor Soccer Club, 82 Ohio St.3d 367, 369-370, 696

N.E.2d 201 (1998).

                              B. Double dismissal Rule
       {¶12} Mary argues U.S. Bank’s claims against her are barred by the double

dismissal rule set forth in Civ.R. 41(A)(1). Civ.R. 41(A)(1) allows a party to voluntarily

dismiss its complaint. The rule further provides that “[u]nless otherwise stated in the

notice of dismissal or stipulation, the dismissal is without prejudice, except that a notice

of dismissal operates as an adjudication upon the merits of any claim that the plaintiff has

once dismissed in any court.” In other words, a second voluntary dismissal of a complaint

operates “with prejudice.”

       {¶13} However, the double dismissal rule does not bar a third claim if the third

claim is different from the dismissed claims. Deutsche Bank Natl. Trust Co. v. Smith, 1st

Dist. Hamilton No. C-140514, 2015-Ohio-2961, citing U.S. Bank Natl. Assn. v. Gullotta,

120 Ohio St.3d 399, 2008-Ohio-6268, 899 N.E.2d 987, ¶ 33 (“Civ.R. 41(A) would not

apply to bar a third claim if the third claim were different from the dismissed claims.”);

see also Canty v. Auto-Owners Mut. Ins. Co., 10th Dist. Franklin No. 14AP-46,

2014-Ohio-2507. In Smith, the court held that because the mortgagor cured the default, a

claim based on a subsequent default was different from the previously dismissed claims,

and the double dismissal rule was inapplicable. Id. at ¶ 14.

       {¶14} In this case, the parties reached an agreement that modified the terms of the

note on which the first complaint was based. Both the principal amount of the loan and

the interest rate were modified. Indeed, there are different default dates between the first

and second actions. Thus, the second and third complaints were based on a default of the

modified terms of the note while the first complaint was based on a default on the original
terms of the note.      Mary never challenged the validity of the loan modification

agreement. Thus, because the dismissal of the second complaint constituted the first

dismissal on the new claim, it did not operate as an adjudication on the merits, and the

third complaint was not barred by the double dismissal rule. Accordingly, the trial court

properly concluded that U.S. Bank’s foreclosure claim was not barred by or under the

doctrine of res judicata.

       {¶15} The first and second assignments of error are overruled.

       {¶16} Judgment affirmed.

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

       The court finds there were reasonable grounds for this appeal.

       It is ordered that a special mandate be sent to 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.

EILEEN T. GALLAGHER, JUDGE

LARRY A. JONES, SR., A.J., and
SEAN C. GALLAGHER, J., CONCUR