Nationstar Mtge., L.L.C. v. Kereszturi ( 2013 )

[Cite as Nationstar Mtge., L.L.C. v. Kereszturi, 2013-Ohio-5849.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
TRUMBULL COUNTY, OHIO
NATIONSTAR MORTGAGE, LLC, : OPINION
ASSIGNEE OF BANK OF AMERICA,
N.A., :
Plaintiff-Appellee, :
CASE NO. 2013-T-0065
- vs - :
STEVE KERESZTURI, a.k.a. :
STEVE KERESZTURI, JR., et al.,
:
Defendants,
:
(BIG BLUE CAPITAL PARTNERS, LLC),
:
Appellant.
Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2012 CV
170.
Judgment: Reversed and remanded.
Stacy L. Hart and Susan Mandryk, Lerner, Sampson & Rothfuss, L.P.A., 120 East
Fourth Street, 8th Floor, P.O. Box 5480, Cincinnati, OH 45201-5480, and Susan
Mandryk, Lerner, Sampson & Rothfuss, P.O. Box 5480, Cincinnati, OH 45201-5480
(For Plaintiff-Appellee).
Daniel M. Solar and Marc E. Dann, Doberdruk & Harshman Law Office, 4600 Prospect
Avenue, Cleveland, OH 44103 (For Appellant).
THOMAS R. WRIGHT, J.
{¶1} This appeal is from the Trumbull County Court of Common Pleas.
Appellant Big Blue Capital Partners, LLC (“Big Blue”) sought to intervene in this
foreclosure action after acquiring title to property that is subject to the current litigation.
The trial court denied the motion to intervene finding that the doctrine of lis pendens
barred intervention of Big Blue. For the reasons set forth below, we reverse and
remand.
{¶2} On or about May 6, 2008, defendants Steve Kereszturi a.k.a Steve
Kereszturi, Jr. and Judy A. Kereszturi (collectively “the Kereszturis”) executed a note in
the amount of $134,024 and a mortgage on their residential property securing payment
to Bank of America. The Kereszturis allegedly defaulted on their mortgage in June of
2011 and Bank of America initiated this foreclosure action. While this foreclosure
action was pending the Kereszturis filed a voluntary petition under Chapter 7 in federal
bankruptcy court. Big Blue obtained title to the foreclosed property through a trustee’s
deed on September 25, 2012.
{¶3} Big Blue subsequently filed a motion to dismiss and a motion to intervene
on January 16, 2013, which the trial court later denied. The trial court determined that
lis pendens barred intervention by Big Blue without making any findings as to whether
Big Blue met the requirements under Civ.R. 24(A)(2) to intervene as of right. Bank of
America, having assigned its note and mortgage on the Kereszturis’ property to
appellee Nationstar, sought to substitute Nationstar as the real party of interest. The
trial court substituted Nationstar as the party-plaintiff on May 30, 2013. Shortly
afterward, defendant-appellant appealed to this court.
{¶2} Big Blue alleges as their first assignment of error that:
{¶3} “The trial court erred in denying Appellant’s motion to intervene pursuant
to Civ.R. 24(A)(2) because lis pendens does not prevent a party, who obtains an
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interest in a property after a foreclosure complaint is filed against such property, from
intervening in the underlying foreclosure action.”
{¶4} We review denial of motions to intervene pursuant to Civ.R. 24(A)(2) for
an abuse of discretion. Peterman v. Pataskala, 122 Ohio App. 3d 758, 761 (5th Dist.
1997) (citation omitted). “As this court recently stated, the term ‘abuse of discretion’ is
one of art, ‘connoting judgment exercised by a court, which does not comport with
reason or the record.’ State v. Underwood, 11th Dist. No. 2008-L-113, 2009-Ohio-
2089, ¶30. “[W]hen an appellate court is reviewing a pure issue of law, ‘the mere fact
that the reviewing court would decide the issue differently is enough to find error (of
course, not all errors are reversible. Some are harmless; others are not preserved for
appellate review). By contrast, where the issue on review has been confined to the
discretion of the trial court, the mere fact that the reviewing court would have reached a
different result is not enough, without more, to find error.’” Sertz v. Sertz, 11th Dist.
Lake No. 2011-L-063, 2012-Ohio-2120, ¶31, quoting State v. Beechler, 2d Dist. Clark
No. 09-CA-54, 2010-Ohio-1900, ¶67. Civ.R. 24(A) governs intervention as of right and
states in pertinent that:
{¶5} “Upon timely application anyone shall be permitted to intervene in an
action * * * (2) when the applicant claims an interest relating to the property or
transaction that is the subject of the action and the applicant is so situated that the
disposition of the action may as a practical matter impair or impede the applicant's
ability to protect that interest, unless the applicant's interest is adequately represented
by existing parties.”
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{¶6} In the present matter, the trial court did not analyze whether Big Blue met
the conditions stated in Civ.R. 24(A)(2); rather, the trial court concluded that lis
pendens barred Big Blue from intervening in this suit. Though Big Blue makes several
distinct arguments, the core of their contention is that lis pendens, as codified in R.C.
2703.26, only causes a party who obtains an interest in property, during the pendency
of litigation over that property, to have their interest be subject to the outcome of the
litigation. Appellee appears to agree with Big Blue’s assessment by arguing that any
interest acquired after lis pendens attaches is subject to the consequences of the
litigation. Therefore, according to appellee, Ohio places the burden on prospective
buyers to investigate their properties before acquiring their properties.
{¶7} R.C. 2703.26 provides that: “When a complaint is filed, the action is
pending so as to charge a third person with notice of its pendency. While pending, no
interest can be acquired by the third person in the subject of the action, as against the
plaintiff’s title.” For lis pendens to apply to a particular action, the following three
requirements must be met: “(1) The property must be of a character to be subject to the
rule; (2) the court must have jurisdiction both of the person and the res; and (3) the
property or res involved must be sufficiently described in the pleadings. It may be
added that the litigation must be about some specific thing that must be necessarily
affected by the termination of the suit.” Cook v. Mozer, 108 Ohio St. 30, 37 (1923)
(quotation omitted). “The general intent and effect of the doctrine of lis pendens is to
charge third persons with notice of the pendency of an action, and to make any interest
acquired by such third persons subject to the outcome and judgment or decree of the
pending lawsuit.” Irwin Mortgage Corp. v. Dupee, 197 Ohio App. 3d 117, 2012-Ohio-
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1594, ¶9 (12th Dist.), citing Bank of New York v. Barclay, 10th Dist. Franklin, No.
03AP-844, 2004-Ohio-1217, ¶10.
{¶8} In the instant matter, we agree with Big Blue. Lis pendens does not
prevent Big Blue from intervening. Nothing in the doctrine forbids or discourages a
purchaser of property that is subject to litigation from intervening in that litigation to
protect their interest in the property. In fact, intervening would typically be the most
prudent course of action for the purchaser as the purchaser usually is the only one with
a stake in the outcome.
{¶9} Further, we note that in Bates v. Postulate Investments, 176 Ohio App. 3d
523, 2008-Ohio-2815, (8th Dist.), the Eighth District found in dicta that a subsequent
purchaser of a property that was subject to a foreclosure action should intervene to
protect their interest. In Bates, the plaintiff in that suit had acquired property that was
at the time the subject of a foreclosure, and subsequently initiated suit after the sale
had been confirmed by the court. Id. ¶¶1-9. In determining the plaintiff’s suit was
barred by lis pendens, the Eighth District stated:
{¶10} “Once the court in the foreclosure action confirmed the sheriff's sale on
August 31, 2006, Postulate became the legal title holder of the subject property, and
Otto could no longer exercise his right of redemption. Therefore, the plaintiffs should
have sought to intervene in the foreclosure action, because they transacted an interest
in the subject property after the proceedings began, rather than improperly instituting
an entirely separate proceeding against Postulate.” Id. ¶23 (Emphasis added).
Accordingly, we find the doctrine of lis pendens does not bar Big Blue’s intervention in
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this litigation. Consequently, the trial court erred in denying the motion to intervene for
the reasons stated.
{¶11} Big Blue’s assignment of error is well-taken. We reverse the judgment of
the trial court and remand for further proceedings. On remand, the trial court must
determine whether Big Blue is entitled to intervene pursuant to Civ.R. 24.
CYNTHIA WESTCOTT RICE, J.,
COLLEEN MARY O’TOOLE, J.,
concur.
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