Court Opinion

ID: 3692020
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:34:06.394007+00
Date Added: 2024-06-11T13:46:37.973303
License: Public Domain

{¶ 46} I respectfully concur in part and dissent in part with the findings of the majority. I concur with the majority that the trial court had subject-matter jurisdiction of the proceedings, as raised in the first assigned error. With *Page 390 
respect to assigned errors two, three, and four, I respectfully dissent. With respect to the fifth assigned error, I would reverse and remand the cause to the trial court for a hearing on the payment of the receiver fees.
 {¶ 47} The majority makes a compelling case for the principle that a trial court may not empower a receiver to take away contractual lien rights in property without the consent of lien holders; nevertheless, under the facts in this case, I would uphold the sale and the ruling of the trial court.
 {¶ 48} The properties in question had what can only be described as a tortured history. Initially encumbered by $750,000 in mortgage debt, additional losses spiraled to over $2.6 million by the time Eastlake Land Development and the state of Ohio reached an agreement on the amount of debt incurred to the state. In the end, the total debt for all the transactions exceeded $3 million. It is hard to imagine how acquiring a lien interest of $750,000 in such a property could ever prove to be viable, but AFF eventually acquired the liens.
 {¶ 49} I dissent because nothing in R.C. 2735.04
or 2735.01 limits a receiver's ability to transfer property short of limitations placed on the receiver by the trial court. R.C. Chapter 2735 does not contain any restrictions on what the court may authorize when it issues orders regarding receivership property. Quill v. Troutman Ents., Inc., Montgomery App. No. 20536, 2005-Ohio-2020, 2005 WL 994676.
 {¶ 50} Further, I can find no Ohio case that holds that the only way to extinguish a lienholder's interest in a property is through a foreclosure action.
 {¶ 51} In today's volatile real estate climate, many distressed properties could be hopelessly encumbered by liens based on bad investment decisions. The receiver's authority, with the consent of the trial judge, provides a venue out of this problem in some circumstances. This is not to diminish the contractual interests of the lienholder. Their interest is protected in the proceeds of the sale. In this instance, the receiver, with court approval, deemed the value to be $250,000. In the absence of a claim of fraud or misrepresentation, the receiver is presumed to have acted in the parties' best interest.
 {¶ 52} I would also affirm on the basis that AFF failed to take steps to preserve its interests beyond the sale price established by the receiver. In this instance, the receiver petitioned the trial court on January 4, 2007, to sell the property. The original and amended court orders, respectively dated January 30, 2007, and February 2, 2007, expressly authorized the receiver to sell the properties free and clear. AFF never sought to stay the trial court's decision and did not file an objection to the receiver's actions until February 2, 2007, when the sale of the property was in the process of closing. Further, even after the *Page 391 
sale, AFF took no steps to attach the proceeds of the sale or otherwise protect its lien interest.
 {¶ 53} As noted in Quill,2005-Ohio-2020, 2005 WL 994676, "appellate arguments are waived where parties could have alerted the trial court to potential error, but failed to do so. See, e.g., State v. Childs
(1968), 14 Ohio St. 2d 56, 43 O.O.2d 119, 236 N.E.2d 545, at paragraph three of the syllabus, and Bank One Dayton, N.A.v. Ellington (1995), 105 Ohio App. 3d 13, 17,663 N.E.2d 660. We have discretion to consider plain error, but we do so only `"with the utmost caution, under exceptional circumstances, and to prevent a manifest miscarriage of justice."' Stiver v. Miami Valley Cable Council
(1995), 105 Ohio App. 3d 313, 318, 663 N.E.2d 1310," quotingSchade v. Cartiegie Body Co. (1982),70 Ohio St. 2d 207, 209, 24 O.O.3d 316, 436 N.E.2d 1001, quoting State v.Long (1978), 53 Ohio St. 2d 91, 7 O.O.3d 178,372 N.E.2d 804, paragraph three of the syllabus.
 {¶ 54} Further, the holding by the majority raises concerns over the status of the bona fide purchaser of these properties under both R.C. 2325.03 and 2329.45. Both statutes protect the interest of the bona fide purchaser when that purchaser relies on a final judgment or order and acquires the property for value in good faith. I do not believe that the majority opinion addresses this issue.
 {¶ 55} Lastly, I believe that AFF is entitled to a hearing on the payment of the receiver fees from the proceeds of the sale. I would remand the cause for a hearing on that issue but affirm the trial court's ruling with respect to the remaining assigned errors.