Court Opinion

ID: 2705726
Source: CourtListenerOpinion
Date Created: 2014-08-04 22:39:51.779709+00
Date Added: 2024-06-11T13:25:08.869702
License: Public Domain

[Cite as Bank of Am. v. Kuchta, 2012-Ohio-5562.]

STATE OF OHIO                    )                     IN THE COURT OF APPEALS
                                 )ss:                  NINTH JUDICIAL DISTRICT
COUNTY OF MEDINA                 )

BANK OF AMERICA                                        C.A. No.     12CA0025-M

        Appellee

        v.                                             APPEAL FROM JUDGMENT
                                                       ENTERED IN THE
GEORGE M. KUCHTA, et al.                               COURT OF COMMON PLEAS
                                                       COUNTY OF MEDINA, OHIO
        Appellants                                     CASE No.   10CIV1003

                                DECISION AND JOURNAL ENTRY

Dated: December 3, 2012

        WHITMORE, Presiding Judge.

        {¶1}    Defendant-Appellants, George and Bridget Kuchta, appeal from the judgment of

the Medina County Court of Common Pleas, denying their motion for relief from judgment.

This Court reverses.

                                                   I

        {¶2}    In 2002, Appellants financed a purchase of property in Hinckley, Ohio.

Appellants executed a promissory note for $650,000 in favor of Wells Fargo and secured the

note by a mortgage granting a security interest in the property to Wells Fargo.

        {¶3}    On June 1, 2010, Bank of America filed a complaint in foreclosure, in which it

claimed to be the holder of the promissory note executed by Appellants in 2002. The note did

not contain any indorsements. Bank of America attached a copy of the mortgage and promissory

note. On June 10, 2010, Wells Fargo executed an Assignment of Mortgage. The Assignment

states that Wells Fargo “does hereby sell, assign, transfer and set over unto Bank of America * *
                                                2

*, a certain mortgage from [Appellants] * * *, together with the Promissory Note secured thereby

and referred to therein; and all sums of money due and to become due thereon, and secured by

the following real estate * * *.” This assignment was recorded on June 23, 2010.1

         {¶4}   On July 2, 2010, Appellants filed an answer pro se, in which they argued that the

complaint failed to show that Bank of America owned or was assigned their mortgage.

         {¶5}   Subsequently, Bank of America filed a motion for summary judgment and an

affidavit of Herman John Kennerty in support.          Kennerty, the Vice President of Loan

Documentation for Wells Fargo, the servicing agent for Bank of America, stated that Bank of

America is the holder of Appellants’ promissory note and mortgage and attached a copy of the

Assignment of Mortgage. Appellants did not oppose the motion for summary judgment.

         {¶6}   Throughout the following year, “the [c]ourt conducted numerous settlement

conferences in an attempt to avoid foreclosure and secure a loan modification for [Appellants].”

In June 2011, Bank of America determined that Appellants did not qualify for a loan

modification. Shortly thereafter, the court granted Bank of America’s motion for summary

judgment and scheduled the property for a Sheriff’s sale on September 29, 2011. No appeal was

filed.

         {¶7}   On September 23, 2011, Appellants filed a motion to vacate judgment pursuant

to Civ.R. 60(B). The court denied their motion on September 29, 2011. That same day,

Appellants filed for bankruptcy, and the case was stayed until the bankruptcy action was

1
 Attached, as exhibit C, to its affidavit in support of its motion for summary judgment is a copy
of the Assignment of Mortgage. The cover page from the Medina County Recorder’s office
notes the filing date as June 23, 2010, the document type as an assignment, and the number of
pages as five. We note, however, that the following pages are not incorporated into that cover
page or date stamped. Appellants do not challenge the filing of the Assignment.
                                                3

terminated in March 2012. Appellants now appeal from the court’s denial of their motion to

vacate judgment and raise one assignment of error for our review.

                                                II

                                       Assignment of Error

       IT WAS AN ABUSE OF DISCRETION FOR THE TRIAL COURT TO DENY
       APPELLANTS’ 60(B) MOTION TO VACATE WITHOUT HOLDING A
       HEARING[.]

       {¶8}   In their sole assignment of error, Appellants argue the court erred by denying their

motion for relief from judgment without holding a hearing. We agree.

       {¶9}   Civ.R. 60(B) provides:

       On motion and upon such terms as are just, the court may relieve a party or his
       legal representative from a final judgment, order or proceeding for the following
       reasons: (1) mistake, inadvertence, surprise or excusable neglect; (2) newly
       discovered evidence which by due diligence could not have been discovered in
       time to move for a new trial under Rule 59(B); (3) fraud (whether heretofore
       denominated intrinsic or extrinsic), misrepresentation or other misconduct of an
       adverse party; (4) 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; or
       (5) any other reason justifying relief from the judgment. The motion shall be
       made within a reasonable time, and for reasons (1), (2) and (3) not more than one
       year after the judgment, order or proceeding was entered or taken. A motion
       under this subdivision (B) does not affect the finality of a judgment or suspend its
       operation.

       {¶10} To prevail on a motion for relief from judgment the moving party must

demonstrate that:

       (1) the party has a meritorious defense or claim to present if relief is granted; (2)
       the party is entitled to relief under one of the grounds stated in Civ.R. 60(B)(1)
       through (5); and (3) the 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 (1976), paragraph two of

the syllabus. A moving party is not automatically entitled to a hearing on a motion for relief
                                                4

from judgment. FirstMerit Bank, N.A. v. Reliable Auto Body Co., 169 Ohio App.3d 50, 2006-

Ohio-5056, ¶ 10 (9th Dist.). “[I]f the Civ.R. 60(B) motion contains allegations of operative facts

which would warrant relief from judgment, the trial court should grant a hearing to take evidence

to verify those facts before it rules on the motion.” State ex rel. Richard v. Seidner, 76 Ohio

St.3d 149, 151 (1996).

       {¶11} A trial court’s decision to deny a motion for relief from judgment without holding

a hearing is reviewed for an abuse of discretion. Id. at 152. Accord Somani v. Dillon, 9th Dist.

No. 2839, 1994 WL 189773, *1 (May 18, 1994). An abuse of discretion implies that the court’s

decision was unreasonable, arbitrary or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d

217, 219 (1983).

       {¶12} One of Appellants’ arguments is that Bank of America did not have a valid

assignment of the mortgage at the time the complaint was filed, and therefore, lacked standing to

bring the foreclosure suit. The Ohio Supreme Court has addressed this issue in a recent decision,

Fed. Home Loan Mtge. Corp. v. Schwartzwald, Slip Opinion No. 2012-Ohio-5017.

       {¶13} “The Ohio Constitution provides in Article IV, Section 4(B): ‘The courts of

common pleas and divisions thereof shall have such original jurisdiction over all justiciable

matters and such powers of review of proceedings of administrative officers and agencies as may

be provided by law.’” (Emphasis sic.) Schwartzwald at ¶ 20.

       Whether a party has a sufficient stake in an otherwise justiciable controversy to
       obtain judicial resolution of that controversy is what has traditionally been
       referred to as the question of standing to sue. Where the party does not rely on
       any specific statute authorizing invocation of the judicial process, the question of
       standing depends on whether the party has alleged * * * a personal stake in the
       outcome of the controversy.
                                                 5

(Internal quotations omitted) Id. at ¶ 21, quoting Cleveland v. Shaker Hts., 30 Ohio St.3d 49, 51

(1987). Standing is a jurisdictional matter and, therefore, must be established at the time the

complaint is filed. Schwartzwald at ¶ 24.

        {¶14} If, at the commencement of the action, a plaintiff does not have standing to invoke

the court’s jurisdiction, the plaintiff cannot “cure the lack of standing * * * by [subsequently]

obtaining an interest in the subject of the litigation and substituting itself as the real party in

interest [pursuant to Civ.R. 17(A)].” Id. at ¶ 39. “The lack of standing at the commencement of

a foreclosure action requires dismissal of the complaint; however, that dismissal is not an

adjudication on the merits and is therefore without prejudice.” Id. at ¶ 40.

        {¶15} In light of the Ohio Supreme Court’s recent decision, we conclude Appellants’

“Civ.R. 60(B) motion contain[ed] allegations of operative facts which would warrant relief from

judgment.” See Seidner, 76 Ohio St.3d at 151. We reverse and remand the case so that the trial

court may apply Fed. Home Loan Mtge. Corp. v. Schwartzwald, Slip Opinion No. 2012-Ohio-

5017.

                                                III

        {¶16} Appellants’ assignment of error is sustained. The judgment of the Medina County

Court of Common Pleas is reversed, and the cause is remanded for further proceedings consistent

with the foregoing opinion.

                                                                                Judgment reversed,
                                                                               and cause remanded.

        There were reasonable grounds for this appeal.
                                                 6

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Medina, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

       Costs taxed to Appellee.

                                                     BETH WHITMORE
                                                     FOR THE COURT

MOORE, J.
CONCURS.

CARR, J.
CONCURS IN JUDGMENT ONLY.

APPEARANCES:

MARC E. DANN and GRACE DOBERDRUK, Attorneys at Law, for Appellants.

SCOTT A. KING and TERRY W. POSEY, JR., Attorney at Law, for Appellee.