DCR Mtge. IV Sub I, L.L.C. v. Hines Invests., L.L.C. ( 2011 )

[Cite as DCR Mtge. IV Sub I, L.L.C. v. Hines Invests., L.L.C., 2011-Ohio-5091.]
COURT OF APPEALS
FAIRFIELD COUNTY, OHIO
FIFTH APPELLATE DISTRICT
: JUDGES:
DCR MORTGAGE IV SUB I, LLC : W. Scott Gwin, P.J.
: Sheila G. Farmer, J.
Plaintiff-Appellee : Julie A. Edwards, J.
:
-vs- : Case No. 11-CA-24
:
:
HINES INVESTMENTS, LLC, et al., : OPINION
Defendants-Appellants
CHARACTER OF PROCEEDING: Civil Appeal from Fairfield County
Court of Common Pleas Case No.
10-CV-1142
JUDGMENT: Dismissed
DATE OF JUDGMENT ENTRY: September 29, 2011
APPEARANCES:
For Plaintiff-Appellee For Defendants-Appellants
TAMI HART KIRBY, ESQ. JAMES G. VARGO
WILLIAM G. DEAS, ESQ. JAMES G. VARGO
WALTER REYNOLDS, ESQ. 6598 Brock Street, First Floor
Porter Wright Morris & Arthur LLP Dayton, Ohio 45402
One South Main Street, Ste. 1600
Dayton, Ohio 45402
[Cite as DCR Mtge. IV Sub I, L.L.C. v. Hines Invests., L.L.C., 2011-Ohio-5091.]
Edwards, J.
{¶1} Appellants, Hines Investments, LLC and Pamela Hines, appeal a
judgment of the Fairfield County Common Pleas Court overruling their motion to remove
a receiver appointed earlier in this case. Appellee is DCR Mortgage IV Sub I, LLC.
STATEMENT OF FACTS AND CASE
{¶2} On September 13, 2010, appellee filed the instant foreclosure action. At
the same time, appellee filed a motion for appointment of a receiver. The court granted
the motion to appoint a receiver on September 14, 2010.
{¶3} On October 28, 2010, appellant filed an answer to the complaint. They
filed a motion to remove the receiver on November 18, 2010, arguing that appellee had
not acted in good faith with regard to the loans secured by the property they sought to
foreclose upon, and the expense of the receiver was unnecessary. The court held a
hearing on the motion and overruled the motion, finding appellants failed to set forth a
good reason for removal of the receiver. Appellants assign two errors on appeal:
{¶4} “I. THE TRIAL COURT ERRED BY GRANTING A MOTION FOR
APPOINTMENT OF A RECEIVER WITHOUT AFFORDING APPELLANTS DUE
PROCESS AND WITHOUT FIRST FOLLOWING THE LOCAL RULE PERMITTING
THE FILING OF AN OPPOSING MEMORANDUM WITHIN FOURTEEN DAYS.
{¶5} “II. ONCE THE PARTIES WERE PROVIDED PROPER NOTICE AND AN
OPPORTUNITY TO BE HEARD REGARDING THE APPOINTMENT OF A RECEIVER,
THE TRIAL COURT ERRED BY RETAINING THE RECEIVER AS THERE WAS
INSUFFICIENT EVIDENCE SUPPORTING THE NECESSITY OF A RECEIVER.”
Fairfield County App. Case No. 11-CA-24 3
I
{¶6} Appellants’ first assignment of error claims error in the September 14,
2010, order appointing a receiver. Appellants recognized that their appeal is clearly
untimely as to this order, but argue because service was not perfected and the court did
not have jurisdiction over them at the time the order was issued, the order is void ab
initio and may be attacked at any time.
{¶7} Failure of proper service deprives the court of personal jurisdiction and
renders any judgment void ab initio. E.g., Pippin v. Hauser (1996), 111 Ohio App.3d
557; Rite Rug Co. v. Wilson (1995), 106 Ohio App.3d 59. The court may obtain
personal jurisdiction by service of process, voluntary appearance or waiver. Maryhew v.
Yova (1984), 11 Ohio St.3d 154, 156. Any objection to the assumption of personal
jurisdiction is waived by a party’s failure to assert a challenge to such jurisdiction at its
first appearance in the case. McBride v. Coble Express, Inc. (1993), 92 Ohio App.3d
505, 510, 636 N.E.22d 356, 359.
{¶8} Appellants filed an answer to the complaint on October 28, 2010, in which
they failed to raise the defense of lack of personal jurisdiction. Further, in their motion
to remove the receiver, filed November 18, 2010, appellants failed to raise lack of
personal jurisdiction at the time the receiver was appointed, but rather argued that
appellee had not acted in good faith with regard to the loans secured by the property
they sought to foreclose upon, and the expense of the receiver was unnecessary. By
failing to raise lack of personal jurisdiction in their first appearance in the case,
appellants have waived the right to challenge the September 14, 2010 judgment at this
point in the proceedings, and their appeal is clearly untimely as to that judgment.
Fairfield County App. Case No. 11-CA-24 4
{¶9} The first assignment of error is overruled.
II
{¶10} In their second assignment of error, appellants argue the court erred in
overruling their motion to remove the receiver.
{¶11} Proceedings related to the appointment and removal of receivers are
special proceedings under R.C. 2505.02 and orders for appointment and removal affect
a substantial right made in a special proceeding. Such orders are, therefore, final and
appealable. See, e.g., Cincinnati, Sandusky & Cleveland Rd. Co. v. Sloan (1876), 31
Ohio St. 1, paragraph two of the syllabus; Forest City Invest. Co. v. Haas (1924), 110
Ohio St. 188, 143 N.E. 549; Metro Life Ins. Co. v. Begin, 59 Ohio App. 5, 6, 7, 16
N.E.2d 1015. However, an order overruling a motion to remove a receiver is not an
order affecting substantial rights of the parties from which an appeal may be
prosecuted, since the status quo between the parties remains the same. Neighbors v.
Thistle Down Co. (1926), 26 Ohio App. 324, 159 N.E. 111; Stiver v. Stiver (1939), 63
Ohio App. 327, 17 O.O. 96, 26 N.E.2d 595. Therefore, an order denying a motion to
remove a receiver is not a final, appealable order since the status quo between the
parties remains the same. Prudential Ins. Co. v. Corporate Circle, Ltd. (1995), 103 Ohio
App.3d 93, 658 N.E.2d 1066, 1071.
Fairfield County App. Case No. 11-CA-24 5
{¶12} The order appealed from is an order overruling a motion to remove a
receiver and is therefore, not a final, appealable order.
{¶13} The appeal is dismissed for want of jurisdiction.
By: Edwards, J.
Gwin, P.J. and
Farmer, J. concur
______________________________
______________________________
______________________________
JUDGES
JAE/r0804
[Cite as DCR Mtge. IV Sub I, L.L.C. v. Hines Invests., L.L.C., 2011-Ohio-5091.]
IN THE COURT OF APPEALS FOR FAIRFIELD COUNTY, OHIO
FIFTH APPELLATE DISTRICT
DCR MORTGAGE IV SUB I, LLC :
:
Plaintiff-Appellee :
:
:
-vs- : JUDGMENT ENTRY
:
HINES INVESTMENTS, LLC, et al., :
:
Defendants-Appellants : CASE NO. 11-CA-24
For the reasons stated in our accompanying Memorandum-Opinion on file, the
appeal of the Fairfield County Court of Common Pleas is dismissed. Costs assessed to
appellants.
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_________________________________
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JUDGES