Ohio Farmers Ins. Co. v. Earles ( 2011 )

[Cite as Ohio Farmers Ins. Co. v. Earles, 2011-Ohio-3103.]
COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
OHIO FARMERS INSURANCE JUDGES:
COMPANY Hon. William B. Hoffman, P.J.
Hon. Julie A. Edwards, J.
Plaintiff-Appellant Hon. Patricia A. Delaney, J.
-vs- Case No. 2010CA00259
COLIN EARLES, ET AL.
OPINION
Defendant-Appellees
CHARACTER OF PROCEEDING: Appeal from the Stark County Court of
Common Pleas
JUDGMENT: Reversed and Remanded
DATE OF JUDGMENT ENTRY: June 20, 2011
APPEARANCES:
For Plaintiff-Appellant For Defendant-Appellees
JEROME W. COOK AMELIA A. BOWER
ERIN K. WALSH PLUNKETT COONEY
MCDONALD HOPKINS LLC 300 East Broad Street Suite 590
600 Superior Avenue, East Columbus, Ohio 43215
Suite 2100
Cleveland, Ohio 44114-2653
Stark County, Case No. 2010CA00259 2
Hoffman, P.J.
{¶1} Plaintiff-appellant Ohio Farmers Insurance Company appeals the June 30,
2010 Judgment Entry of the Stark County Court of Common Pleas entering partial
summary judgment in favor of Defendant-appellees Colin and Monika Earles, Brian and
Traci Miller, Steven and Michele Sehmer, Steven and Mary Ann James, Chad and Mary
Hecky, First Place Bank and Third Federal Savings & Loan Association.
STATEMENT OF THE FACTS AND CASE
{¶2} This case is one of a number of interrelated cases filed in the Stark
County Court of Common Pleas, some of which have been assigned to different trial
court judges and some of which have already made their way to this Court for review.
We offer the following brief summary as background.
{¶3} On July 29, 2004, John Hershberger, acting as president of Danbury Glen
Estates, Inc., filed with the Stark County Recorder a notice of commencement for
improvements to real property pursuant to R.C. 1311.04. At the time, Danbury Glen
Estates, Inc. was the owner of the real estate to be developed later described in the
affidavit for mechanic's lien at issue.
{¶4} On April 4, 2006, Hersh Construction, one of the principal builders for the
project, executed a note in favor of Fifth Third Bank in the amount of $1,552,800.00,
plus interest. To secure the note, Hersh Construction executed a mortgage on twenty-
one (21) lots of the Danbury Glen Estates development.
{¶5} Appellant Ohio Farmers served as the performance bond surety for
Northern Valley Contractors, Inc. Northern Valley Contractors, Inc., assignor to
Appellant Ohio Farmers, became involved in the development project and performed
Stark County, Case No. 2010CA00259 3
work on the streets and the sanitary sewer system. On February 28, 2007, Northern
Valley filed an affidavit for a mechanic's lien with the Stark County Recorder. The
affidavit of mechanic's lien included at least 46 lots in the development project. By
virtue of the performance bond, Northern Valley subsequently assigned its rights under
its mechanics lien to Appellant Ohio Farmers.
{¶6} Northern Valley’s affidavit of mechanic's lien was served on March 2, 2007
on the following: John Hershberger, Danbury Glen Estates, Inc., Jody Hershberger, and
Hershberger Construction, Inc. Danbury Glen Estates LLC was named but not served
with a copy of the affidavit. Furthermore, lots owned by Danbury Glen Estates LLC,
Rural Investors LLC and Brian and Traci Miller were included in the affidavit. However,
the affidavit was not served on certain owners of record for lots which were acquired
prior to the filing of the mechanic’s lien.
{¶7} In August 2008, Hersh Construction filed a declaratory judgment action in
the Stark County Court of Common Pleas, under case number 2008 CV 3574,
challenging the validity of the Ohio Farmer’s Mechanic’s Lien on the property owned by
Danbury, Danbury Glen Estates, LLC, Hersh and Rural Investors, LLC.
{¶8} Multiple parties in case number 2008 CV 3574 filed motions for summary
judgment. The trial court therein entered an order concerning summary judgment. Ohio
Farmers, in lieu of an appeal in Case No.2008 CV 3574, entered into a resolution with
the other parties, resulting in a May 6, 2009 Stipulated Judgment Entry which
determined the mechanic's lien of 2/28/2007 was valid and would relate back to July 29,
2004, the notice of commencement.
Stark County, Case No. 2010CA00259 4
{¶9} Prior to that litigation, Hersh had sold lots to Colin and Monika Earles,
Steven and Michelle Sehmer and Brian and Traci Miller. During the pendency of the
litigation, Hersh sold lots to Steven and Mary Ann James and Chad and Mary Hecky.
{¶10} Appellant filed the within action on July 15, 2009. The trial court granted
partial summary judgment in favor of Appellees Colin and Monika Earles, Brian and
Traci Miller, Steven and Michele Sehmer, Steven and Mary Ann James, Chad and Mary
Hecky, First Place Bank and Third Federal Savings & Loan Association and denied
summary judgment to Appellant via Judgment Entry of June 30, 2010.
{¶11} Appellant now appeals, assigning as error:
{¶12} “I. THE TRIAL COURT ERRED WHEN IT GRANTED PARTIAL
SUMMARY JUDGMENT TO DEFENDANTS-APPELLEES BRIAN AND TRACI MILLER
AND THEIR MORTGAGEE, FIRST PLACE BANK, AND DENIED SUMMARY
JUDGMENT TO OHIO FARMERS ON GROUNDS OF THE TRIAL COURT’S
DECLARATION THAT THE MECHANIC’S LIEN OF OHIO FARMERS WAS INVALID
AS TO THE LAND OF BRIAN AND TRACI MILLER, AND WHERE THE TRIAL COURT
FAILED TO CLARIFY OR RECONSIDER THAT DECLARATION, BASED UPON OHIO
FARMERS’ FAILURE TO IDENTIFY BRIAN AND TRACI MILLER AS OWNERS IN THE
MECHANIC’S LIEN AFFIDAVIT AND SERVE THEM, WHERE THERE WAS NO
DOCUMENTARY EVIDENCE PRESENTED BY BRIAN OR TRACI MILLER THAT
OHIO FARMERS ACTUALLY KNEW THAT THEY HAD BECOME OWNERS OF THE
PARCEL [i.e., ONE OF MANY AT ISSUE] JUST TWENTY-ONE DAYS PRIOR TO THE
RECORDING OF OHIO FARMERS’ MECHANIC’S LIEN.
Stark County, Case No. 2010CA00259 5
{¶13} “II. THE TRIAL COURT ERRED WHEN IT GRANTED PARTIAL
SUMMARY JUDGMENT TO ALL DEFENDANTS-APPELLEES AND DENIED
SUMMARY JUDGMENT TO OHIO FARMERS ON GROUNDS OF THE TRIAL
COURT’S DECLARATION THAT THE MECHANIC’S LIEN OF OHIO FARMERS WAS
INVALID IN ITS TOTALITY, AND FAILED TO CLARIFY OR RECONSIDER THAT
DECLARATION, ON THE ERRONEOUS PREMISE THAT OHIO’S MECHANIC’S LIEN
LAW IMPOSES A STATUTORY OBLIGATION UPON MECHANIC’S LIEN CLAIMANTS
TO PERFORM A TITLE SEARCH AND PRESUMABLY UPDATE THAT TITLE
SEARCH TO THE VERY SECOND BEFORE RECORDING OF THE MECHANIC’S
LIEN, OR RISK FORFEITURE, AS A MATTER OF LAW, OF THEIR ENTIRE
MECHANIC’S LIEN AS TO ALL LAND DESCRIBED THEREIN, AS A RESULT OF ITS
FAILURE TO DISCOVER THE IDENTIFY OF ONE OWNER OF ONE PARCEL, NO
MATTER HOW RECENTLY THAT OWNER MAY HAVE ACQUIRED TITLE, NO
MATTER THAT THE MECHANIC’S LIEN IDENTIFIED ALL OWNERS AND OWNERS’
DESIGNEES IDENTIFIED IN THE NOTICE OF COMMENCEMENT [WHO OWNED
MANY SEPARATE PARCELS] AND THAT THESE OWNERS AND OWNERS’
DESIGNEES WERE SERVED WITH THE MECHANIC’S LIEN AFFIDAVIT.
{¶14} “III. THE TRIAL COURT ERRED WHEN IT GRANTED PARTIAL
SUMMARY JUDGMENT TO DEFENDANT-APPELLEES COLIN AND MONIKA
EARLES, CHAD AND MARY HECKY, STEVEN AND ANN JAMES, AND STEVEN AND
MICHELLE SEHMER AND THEIR MORTGAGEES, AND DENIED SUMMARY
JUDGMENT TO OHIO FARMERS ON GROUNDS OF THE TRIAL COURT’S
DECLARATION, AND ITS FAILURE TO CLARIFY OR RECONSIDER THAT
Stark County, Case No. 2010CA00259 6
DECLARATION, THAT OHIO FARMER’S MECHANIC’S LIEN WAS INVALID AS TO
THE PARCELS OWNED BY DEFENDANTS-APPELLEES COLIN AND MONIKA
EARLES, CHAD AND MARY HECKY, STEVEN AND ANN JAMES, AND STEVEN AND
MICHELLE SEHMER WHERE THE UNDISPUTED DOCUMENTARY EVIDENCE
PROVED THAT THAT THESE OWNERS ALL TOOK TITLE AND THE MORTGAGEES
TOOK THEIR MORTGAGORS AFTER THE RECORDING OF OHIO FARMERS’
MECHANIC’S LIEN AND THE OWNERS RECEIVED THEIR TITLES FROM HERCH
CONSTRUCTION, INC. WHO HAD BEEN IDENTIFIED IN OHIO FARMERS’
MECHANIC’S LIEN AND WHO HAD BEEN SERVED WITH THE MECHANIC’S LIEN
AFFIDAVIT.
{¶15} “IV. THE TRIAL COURT ERRED WHEN IT GRANTED PARTIAL
SUMMARY JUDGMENT TO ALL DEFENDANTS-APPELLEES AND DENIED
SUMMARY JUDGMENT TO OHIO FARMERS ON GROUNDS OF THE TRIAL
COURT’S DECLARATION THAT THE VALIDITY OF OHIO FARMERS’ MECHANIC’S
LIEN WAS SUBJECT TO COLLATERAL ATTACK BY ALL DEFENDANTS-
APPELLEES DESPITE THE TRIAL COURT’S FULL KNOWLEDGE OF TWO
PREVIOUS FINAL ORDERS BY THE STARK COUNTY COURT OF COMMON PLEAS
IN TWO SEPARATE CASES THAT SPECIFICALLY DECLARED THE VALIDITY AND
AMOUNT OF OHIO FARMER’S MECHANIC’S LIEN AND WHERE NO ALLEGATIONS
OR PROOF OF FRAUD OR LACK OF JURISDICTION WERE RAISED OR
SUPPORTED BY DEFENDANTS-APPELLEES BELOW.
{¶16} “V. THE TRIAL COURT ERRED WHEN IT GRANTED PARTIAL
SUMMARY JUDGMENT TO ALL DEFENDANTS-APPELLEES AND DENIED
Stark County, Case No. 2010CA00259 7
SUMMARY JUDGMENT TO OHIO FARMERS WHERE THE TRIAL COURT REFUSED
TO RECOGNIZE THE RES JUDICATA EFFECT OF THE STIPULATED JUDGMENT
ENTRY IN STARK COUNTY COMMON PLEAS COURT CASE NO. 2008 CV 03574
RELATING TO THE VALIDITY AND AMOUNT OF OHIO FARMERS’ MECHANIC’S
LIEN ON THE VERY PARCELS THAT WERE TRANSFERRED BY HERSH
CONSTRUCTION, INC. DIRECTLY TO EACH OF THE DEFENDANTS-APPELLEES
AND UPON WHICH THE BANK DEFENDANTS-APPELLEES TOOK THEIR
RESPECTIVE MORTGAGES.
{¶17} “VI. THE TRIAL COURT ERRED WHEN IT DECLARED THAT THE
EFFECTIVE DATE OF THE AGREED JUDGMENT ENTRY, NUNC PRO TUNC, FILED
IN STARK COUNTY CASE NO. 2007-CVO-1663 [OVER WHICH JUDGE CHARLES
BROWN, NOT JUDGE FORCHIONE, HAD JURISDICTION] WAS EFFECTIVE FROM
THE DATE OF ITS FILING ON MAY 6, 2009 AND THAT ITS EFFECTIVE DATE DID
NOT RELATE BACK TO THE DATE OF THE AGREED JUDGMENT ENTRY THAT IT
WAS OBVIOUSLY INTENDED TO CLARIFY WHICH WAS FILED ON AUGUST 3,
2007.”
I, II, & III
{¶18} Appellant’s first three assigned errors raise common and interrelated
issues; therefore, we will address the arguments together.
{¶19} Summary judgment proceedings present the appellate court with the
unique opportunity of reviewing the evidence in the same manner as the trial court.
Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35, 36, 506 N.E.2d 212.
Therefore, we must refer to Civ.R. 56(C), which provides, in pertinent part: “Summary
Stark County, Case No. 2010CA00259 8
judgment shall be rendered forthwith if the pleadings, depositions, answers to
interrogatories, written admissions, affidavits, transcripts of evidence in the pending
case, and written stipulations of fact, if any, timely filed in the action, show that there is
no genuine issue as to any material fact and that the moving party is entitled to
judgment as a matter of law. * * * A summary judgment shall not be rendered unless it
appears from the evidence or stipulation, and only from the evidence or stipulation, that
reasonable minds can come to but one conclusion and that conclusion is adverse to the
party against whom the motion for summary judgment is made, that party being entitled
to have the evidence or stipulation construed most strongly in the party's favor.”
{¶20} Pursuant to the above rule, a trial court may not enter summary judgment
if it appears that a material fact is genuinely disputed. The party moving for summary
judgment bears the initial burden of informing the trial court of the basis for its motion
and identifying those portions of the record that demonstrate the absence of a genuine
issue of material fact. The moving party may not make a conclusory assertion that the
nonmoving party has no evidence to prove its case. The moving party must specifically
point to some evidence which demonstrates that the nonmoving party cannot support its
claim. If the moving party satisfies this requirement, the burden shifts to the nonmoving
party to set forth specific facts demonstrating there is a genuine issue of material fact for
trial. Vahila v. Hall, 77 Ohio St.3d 421, 429, 1997–Ohio–259, 674 N.E.2d 1164, citing
Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, 662 N.E.2d 264.
{¶21} At issue herein is the validity of the mechanic’s lien filed by Northern
Valley Contractor’s Inc. now owned by Ohio Farmers.
Stark County, Case No. 2010CA00259 9
{¶22} On October 21, 2008, Fifth Third Bank filed a complaint in Stark County
Common Pleas Case 2008 CV 4442 seeking judgment on the note, mortgage and
guarantee in this case. The complaint alleged Hersh had defaulted on a mortgage
granted to Fifth Third on twenty-one lots in the subdivision known as Danbury Glen
Estates. Appellant Ohio Farmers, as the surety for Northern Valley Contractors, Inc.,
filed a motion to intervene, seeking to protect a balance of more than $539,000.00 for
Northern Valley Contractors, Inc’s contracting work. The trial court granted the motion to
intervene.
{¶23} On February 2, 2010, Appellant Ohio Farmers filed the aforesaid
stipulated judgment entry of May 6, 2009, and the responses of Danbury Glen and
Hersh Construction to request for admissions from case number 2008 CV 3574.
{¶24} Upon reviewing the parties' briefing of the issues, the trial court granted
Fifth Third's motion for summary judgment and denied Ohio Farmer's motion for
summary judgment, concluding, inter alia, that the 2/28/07 affidavit of mechanic's lien
filed by Northern Valley Construction did not create a lien against the real estate in
question. The matter proceeded to appeal before this Court.
{¶25} Via Judgment Entry of April 11, 2011, this Court reversed and remanded
the decision of the trial court finding the owners’ name omissions did not render the
mechanics lien invalid as to the lot owners, including the Millers. Fifth Third Bank v.
Ohio Farmers Insurance Company, (April 11, 2011) Stark App. Case No.
2010CA00286. This panel agrees with our colleagues rationale and decision finding the
mechanics lien is valid.
{¶26} Appellant’s first three assignments of error are sustained.
Stark County, Case No. 2010CA00259 10
IV, V, and VI
{¶27} In light of our disposition of Appellant’s Assignments of Errors I, II, and III,
we find any discussions of these assignments of error to be moot.
{¶28} The June 30, 2010 Judgment Entry of the Stark County Court of Common
Pleas is reversed, and the matter remanded for further proceedings in accordance with
the law and this opinion.
By: Hoffman, P.J.
Edwards, J. and
Delaney, J. concur
s/ William B. Hoffman _________________
HON. WILLIAM B. HOFFMAN
s/ Julie A. Edwards___________________
HON. JULIE A. EDWARDS
s/ Patricia A. Delaney _________________
HON. PATRICIA A. DELANEY
Stark County, Case No. 2010CA00259 11
IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
OHIO FARMERS INSURANCE :
COMPANY :
:
Plaintiff-Appellant :
:
-vs- : JUDGMENT ENTRY
:
COLIN EARLES, ET AL. :
:
Defendant-Appellees : Case No. 2010CA00259
For the reason stated in our accompanying Opinion, the judgment of the Stark
County Court of Common Pleas is reversed, and the matter is remanded to that court
for further proceedings in accordance with the law and our Opinion. Costs to Appellees.
s/ William B. Hoffman _________________
HON. WILLIAM B. HOFFMAN
s/ Julie A. Edwards___________________
HON. JULIE A. EDWARDS
s/ Patricia A. Delaney _________________
HON. PATRICIA A. DELANEY