Am. Savs. Bank v. Pertuset ( 2014 )


Menu:
  • [Cite as Am. Savs. Bank v. Pertuset, 2014-Ohio-1290.]
    IN THE COURT OF APPEALS OF OHIO
    FOURTH APPELLATE DISTRICT
    SCIOTO COUNTY
    AMERICAN SAVINGS BANK,          :
    FSB, et al.,                    :
    :
    Plaintiff-Appellee,        :   Case No. 13CA3564
    :
    vs.                        :
    :   DECISION AND JUDGMENT
    CARL PERTUSET, et al.,          :   ENTRY
    :
    Defendants-Appellants.     :   Released: 03/27/14
    _____________________________________________________________
    APPEARANCES:
    Bruce M. Broyles, The Law Office of Bruce M. Broyles, Boardman, Ohio,
    for Appellants.
    Jeffrey B. Sams, Pickerington, Ohio, and Joshua D. Howard, Portsmouth,
    Ohio, for Appellee, American Savings Bank.1
    _____________________________________________________________
    McFarland, J.
    {¶1} This is an appeal from a Scioto County Common Pleas Court
    summary judgment in favor of American Savings Bank, fsb (American) and
    ASB Development Corp. (ASB), collectively referred to as “American,”
    plaintiffs below and Appellees herein, on their foreclosure claims against
    Carl E. Pertuset and Vera M. Pertuset, defendants below and appellants
    herein. On appeal, Appellants contend that the trial court erred in granting
    1
    Farm Credit Services of Mid-America PCA has not filed a brief and is not participating on appeal.
    Scioto App. No. 13CA3564                                                       2
    Appellees’ renewed motion for summary judgment, which was granted after
    the trial court vacated its original grant of summary judgment, which this
    Court had previously affirmed on appeal, without a remand.
    {¶2} In light of our determination that the trial court lacked
    jurisdiction to vacate its original summary judgment grant and decree in
    foreclosure in favor of American, we find that it exceeded its authority in
    doing so. We must, therefore, reverse the trial court’s decision vacating
    those prior orders as well as trial court’s order granting American’s renewed
    motion for summary judgment. As such, we find, in accordance with our
    prior decision rendered in American Savings Bank, fsb, et al. v. Carl E.
    Pertuset, et al., 4th Dist. Scioto No. 11CA3442, 2013-Ohio-566, that the
    original grant of summary judgment and decree in foreclosure stands valid
    as the law of the case, as affirmed once already by this Court. Accordingly,
    the referenced decisions of the trial court are reversed.
    FACTS
    {¶3} We initially set forth the facts, as already stated in or prior
    decision regarding this matter.
    “Between 2000 and 2008, appellants executed and
    delivered three promissory notes to American and one
    promissory note to ASB. Appellants also executed mortgages
    Scioto App. No. 13CA3564                                                  3
    on properties to secure the notes. Appellees commenced the
    instant action on May 20, 2010 and alleged appellants were in
    default on the notes and sought, inter alia, foreclosure of their
    mortgage interests. Appellants answered, but their answer did
    not address the merits of the claims. Rather, they requested a
    dismissal of the case because the United States Bankruptcy
    Court had discharged their debts. Later, the parties learned that
    the bankruptcy proceedings had been dismissed, so the matter
    proceeded accordingly.
    Appellees eventually requested summary judgment and
    argued that no genuine issues of material fact existed and they
    were entitled to judgment as a matter of law. Appellees
    supported their motion with an affidavit from Jack Stephenson,
    Vice President of American and an employee of ASB, who
    attested (1) to the amounts due and owing on the notes, (2) that
    the instruments attached to the complaint as exhibits are true
    and accurate copies, and (3) that his employers still hold the
    notes. Appellants filed a ‘response’ and ‘notice of non
    acceptance and notice of non consent’ and raised a number of
    defenses.
    Scioto App. No. 13CA3564                                                       4
    Subsequently, the trial court granted the motion and
    directed the appellees to submit an entry to the court. * * *”
    American Savings Bank, fsb, et al. v. Carl E. Pertuset, et al., ¶
    2-4.
    {¶4} After the court filed a decree of foreclosure on August 9, 2011,
    an initial direct appeal followed. Appellant’s initial appeal of this matter
    alleged that the trial court had erred in granting summary judgment in favor
    of American because American failed to conclusively establish they were
    the proper party in interest and that they failed to establish privity with
    Appellants. They also argued the trial court erred in granting summary
    judgment in favor of American, claiming that American had failed to
    conclusively establish the amount of their damages. While this matter was
    initially pending on appeal, the property sold to third party buyers at a
    sheriff’s sale held on November 14, 2012. This Court issued a decision on
    the merits affirming the trial court’s grant of summary judgment and decree
    in foreclosure on February 5, 2013.
    {¶5} Subsequently, on February 28, 2013, American filed a motion to
    vacate the trial court’s January 10, 2011, summary judgment grant as well as
    its August 9, 2011, decree in foreclosure, based upon its concern regarding a
    potential procedural issue regarding the filing of the final judicial report
    Scioto App. No. 13CA3564                                                                                     5
    being filed after the final judgment entry, rather than before, as required by
    R.C. 2329.191. Appellants joined in this motion, but for different reasons,
    claiming that the trial court lacked subject matter jurisdiction. The trial
    court denied Appellants’ motion, but filed a judgment entry on March 4,
    2013, granting American’s motion and vacating its own original grant of
    summary judgment and decree in foreclosure, after this Court had already
    affirmed both of the those decisions on direct appeal.
    {¶6} After the trial court vacated these decisions, American filed a
    renewed motion for summary judgment, and Appellants followed with
    additional discovery requests, motions for extensions of time to conduct
    discovery and a motion to compel discovery. Finally, on June 19, 2013,
    over the objection of Appellants, the trial court once again granted summary
    judgment in favor of American.2 The matter is now before us for a second
    time, with Appellants once again claiming that the trial court erred in
    granting summary judgment.
    ASSIGNMENT OF ERROR
    “I.      THE TRIAL COURT ERRED IN GRANTING SUMMARY
    JUDGMENT.”
    2
    The trial court’s June 19, 2013, grant of summary judgment was not a final, appealable order as it did not
    also order foreclosure of the properties at issue. However, in light of our determination that the trial court
    lacked jurisdiction to issue this order to begin with, we find this issue to be inconsequential.
    Scioto App. No. 13CA3564                                                        6
    LEGAL ANALYSIS
    {¶7} In their sole assignment of error, and much like in their first
    appeal of this matter, Appellants contend that the trial court erred in granting
    summary judgment in favor of American. In raising this assignment of
    error, Appellants argue that American failed to satisfy the conditions
    precedent to filing suit by failing to provide them notice of default and
    notice of acceleration. Appellants also argue that American failed to comply
    with discovery and as such, the trial court should not have granted summary
    judgment. However, before we reach the merits of Appellants’ argument,
    we must address a threshold procedural matter.
    {¶8} As set forth above, the question of whether the trial court
    properly granted summary judgment and a decree in foreclosure in favor of
    American has already been before this Court on direct appeal. Further, as
    we have noted, this Court has previously affirmed the trial court’s January
    10, 2011, grant of summary judgment and August 9, 2011, decree in
    foreclosure. American Savings Bank, fsb, et al. v. Carl E. Pertuset, et 
    al., supra
    . Despite our affirmance on appeal without remand, the trial court, at
    the request of the parties, vacated its summary judgment grant and decree in
    foreclosure. Based upon the following, we conclude that the trial court
    exceeded its authority in doing so and, as such, its actions were contrary to
    Scioto App. No. 13CA3564                                                        7
    the law of the case, as established in this Court’s prior decision regarding
    this matter.
    {¶9} In Nolan v. Nolan, 
    11 Ohio St. 3d 1
    , 
    462 N.E.2d 410
    (1984), the
    Supreme Court of Ohio discussed the doctrine of the law of the case in
    relation to a trial court’s failure to execute a remand mandate given by a
    reviewing court. Specifically, Nolan involved a trial court’s complete
    restructuring of a real estate settlement on remand, rather than limiting its
    action on remand to making findings regarding the right of occupancy of the
    marital home, as instructed by the reviewing court. Nolan at 2. In response,
    the Supreme Court of Ohio held that “[a]bsent extraordinary circumstances,
    such as an intervening decision by the Supreme Court, an inferior court has
    no discretion to disregard the mandate of a superior court in a prior appeal in
    the same case.” Nolan at syllabus (internal citations omitted). In reaching
    its decision, the Nolan court discussed the law of the case doctrine as
    follows:
    “* * * the doctrine provides that the decision of a reviewing
    court in a case remains the law of that case on the legal
    questions involved for all subsequent proceedings in the case at
    both the trial and reviewing levels.” Nolan at 3 (internal
    citations omitted).
    Scioto App. No. 13CA3564                                                        8
    The Nolan court further noted that while the rule will not be applied to
    achieve unjust results, the application of the rule is necessary “to ensure
    consistency of results in a case” as well as “to avoid endless litigation by
    settling the issues, and to preserve the structure of superior and inferior
    courts as designed by the Ohio Constitution.” Id.; citing Gohman v. St.
    Bernard, 
    111 Ohio St. 726
    , 730-731, 
    146 N.E. 291
    (1924) (reversed on other
    grounds) and State, ex rel. Potain v. Mathews, 
    59 Ohio St. 2d 29
    , 32, 
    391 N.E.2d 343
    (1979).
    {¶10} We find the reasoning set forth in Nolan with respect to the
    doctrine of the law of the case to be applicable to the matter presently before
    us, where the trial court vacated two orders previously affirmed by this
    Court on appeal. In fact, we find this doctrine even more compelling
    considering the trial court vacated these orders absent a remand from this
    Court. Simply put, absent a remand from this Court after a decision on the
    merits, the trial court lacked jurisdiction to vacate its own orders.
    {¶11} In reaching this result, we rely on the reasoning set forth not
    only in Nolan v. 
    Nolan, supra
    , but also our prior reasoning in State of Ohio,
    ex rel. Jim Petro v. Marshall, 4th Dist. Scioto No. 05CA3004, 2006-Ohio-
    5357. In that case, the trial court granted a Civ.R. 60(B) motion to vacate a
    judgment filed by Adrian Rawlins and then granted Rawlins judicial release
    Scioto App. No. 13CA3564                                                          9
    from prison, despite the fact that this Court had previously affirmed
    Rawlins’ conviction and sentence on appeal, without a remand. 
    Id. at ¶
    4.
    As a result of the trial court’s actions, the Attorney General filed a complaint
    for a writ of prohibition, alleging that the trial court lacked jurisdiction to
    vacate Rawlins’ conviction. 
    Id. at ¶
    1. This Court granted the writ,
    reasoning that “Judge Marshall patently and unambiguously lacked
    jurisdiction to entertain the motion after this court had expressly ruled on the
    same issues the motion presented.” 
    Id. In reaching
    our decision, we
    reasoned as follows:
    “Civ.R. 60(B) clearly gives the trial court jurisdiction to grant
    relief from a final judgment. However, once a party undertakes
    an appeal and absent a remand, the trial court is divested of
    jurisdiction to take any action that is inconsistent with the
    appellate court's exercise of jurisdiction. Post v. Post (1990), 
    66 Ohio App. 3d 765
    , 769, 
    586 N.E.2d 185
    ; State ex rel. Special
    
    Prosecutors, supra, at 97
    , 
    378 N.E.2d 162
    .” 
    Id. at ¶
    27.
    {¶12} As we discussed in State, ex rel. Petro v. Marshall, the Special
    Prosecutors case involved a trial court’s subsequent grant of a motion to
    withdraw a guilty plea when the defendant “lost the appeal of a conviction
    Scioto App. No. 13CA3564                                                   10
    based upon the guilty plea.” 
    Id. at ¶
    28. We noted that in Special
    Prosecutors, the Supreme Court reasoned that
    “allowing the trial court to consider a Crim.R. 32.1 motion to
    withdraw a guilty plea subsequent to an appeal and affirmance
    by the appellate court ‘would affect the decision of the
    reviewing court, which is not within the power of the trial court
    to do.’ ” 
    Id. at ¶
    29; citing Special Prosecutors at 97-98.
    {¶13} Although both State, ex rel. Petro v. Marshall and Special
    Prosecutors both involved underlying criminal matters, we noted in State, ex
    rel. Petro v. Marshall at ¶ 30 that the Supreme Court of Ohio has made a
    similar rule concerning Civ.R. 60(B) motions. Specifically, we noted as
    follows:
    “* * * absent a remand from the appellate court, ‘an appeal
    divests trial courts of jurisdiction to consider Civ.R. 60(B)
    motions for relief from judgment.’ See Howard v. Catholic
    Social Servs. of Cuyahoga Cty., Inc., 
    70 Ohio St. 3d 141
    , 147,
    
    637 N.E.2d 890
    , 1994-Ohio-219, 
    637 N.E.3d 890
    , citing State,
    ex rel. East Mfg. Corp. v. Ohio Civ. Rights Comm. (1992), 
    63 Ohio St. 3d 179
    , 181, 
    586 N.E.2d 105
    . See, also, 
    Post, supra, at 770
    , 
    586 N.E.2d 185
    . Once a case has been appealed, ‘the trial
    Scioto App. No. 13CA3564                                                          11
    court is divested of jurisdiction except “over issues not
    inconsistent with that of the appellate court to review, affirm,
    modify or reverse the appealed judgment, such as the collateral
    issue like contempt * * *.” ’ State ex rel. State Fire Marshall v.
    Curl, 
    87 Ohio St. 3d 568
    , 570, 2000-Ohio-248, [722] N.E.2d 73,
    quoting Special Prosecutors at 97, 
    378 N.E.2d 162
    . Where an
    appellate court has already ruled on an issue in a direct appeal,
    a trial court's ‘reconsideration’ of that same issue is inconsistent
    with the appellate court's exercise of jurisdiction and the
    doctrine of the law of the case. See, Hopkins v. Dyer, 104 Ohio
    St.3d 461, 2004-Ohio-6769, 
    820 N.E.2d 329
    , at ¶ 15.” 
    Id. {¶14} Here,
    Appellants brought an initial direct appeal of the trial
    court’s original grant of summary judgment and decree in foreclosure in
    favor of American. We affirmed the trial court’s original grant of summary
    judgment and decree in foreclosure without remand. Subsequent to the
    issuance of our decision, the trial court vacated its own summary judgment
    and foreclosure decisions, based upon a claim by one of the parties that there
    was a potential procedural issue related to a late filing of the final judicial
    report. We note at this juncture that this potential procedural issue should
    Scioto App. No. 13CA3564                                                         12
    have been apparent to the parties at the time of the original appeal and yet no
    error was raised related to it.
    {¶15} As noted in State v. Fischer, 
    128 Ohio St. 3d 92
    , 2010-Ohio-
    6238, 
    942 N.E.2d 332
    , ¶35, “[t]he law-of-the-case doctrine is rooted in
    principles of res judicata and issue preclusion * * *.” Further, the Fischer
    court noted that prior decisions have held that the law of the case doctrine “ ‘
    precludes a litigant from attempting to rely on arguments at a retrial which
    were fully pursued, or available to be pursued, in a first appeal.’ ” 
    Id. at ¶
    34; quoting Hubbard ex rel. Creed v. Sauline, 
    74 Ohio St. 3d 402
    , 404-405,
    
    659 N.E.2d 781
    (1996). Thus, because any issue related to the late filing of
    the final judicial report should have been apparent to the parties and
    therefore was available to be pursued by the parties in the original, direct
    appeal, but was not, any argument based thereon should have been barred,
    we believe, at any additional proceedings at the trial court level.
    {¶16} Recently, several Ohio courts have been confronted with
    questions in the area of foreclosure law with respect to when a trial court
    may vacate a prior judgment that was either not appealed, or was appealed
    and resulted in an affirmance by the reviewing court. These questions seem
    to stem from the recent holding of the Supreme Court of Ohio in the case of
    Federal Home Loan Mortgage Corporation v. Schwartzwald, et al, 134
    Scioto App. No. 13CA3564                                                         
    13 Ohio St. 3d 13
    , 2012-Ohio-5017, 
    979 N.E.2d 1214
    . Schwartzwald did not
    involve the grant or denial of a Civ.R. 60(B) motion for relief from
    judgment. Rather, in Schwartzwald, it was argued by the homeowners that
    the bank lacked standing to sue because it commenced the foreclosure action
    before it obtained an assignment of the promissory note and mortgage
    securing the Schwartzwald’s loan. 
    Id. at ¶
    2. The trial court granted
    summary judgment in favor of the bank and the appellate court affirmed.
    The Supreme Court of Ohio, however, reversed, holding that the bank, under
    the facts, had no standing to invoke the jurisdiction of the common pleas
    court. 
    Id. at paragraph
    one of the syllabus. In reaching its decision, the
    Court noted that “ ‘the issue of standing, inasmuch as it is jurisdictional in
    nature, may be raised at any time during the pendency of the proceedings.’ ”
    
    Id. at ¶
    22; quoting New Boston Coke Corp. v. Tyler, 
    32 Ohio St. 3d 216
    ,
    218, 
    513 N.E.2d 302
    (1987).
    {¶17} A subsequent case, Waterfall Victoria Master Fund Limited v.
    Yeager, et al., 11th Dist. Lake No. 2012-L-071, 2013-Ohio-3206, illustrates
    how the Schwartzwald holding has been carried forward. In Yeager, a
    complaint in foreclosure was filed and default judgment was granted in favor
    of the bank. 
    Id. at ¶
    2-4. Yeager filed a direct appeal, but the appellate court
    affirmed the judgment in favor of the bank. 
    Id. at ¶
    4. After Yeager’s home
    Scioto App. No. 13CA3564                                                        14
    sold at a sheriff’s sale, Yeager filed a Civ.R. 60(B) motion seeking relief
    from the default judgment. 
    Id. at ¶
    5. In support of the motion, Yeager
    argued that the bank did not have any interest in the property at the time it
    foreclosed. 
    Id. The trial
    court denied the motion for relief from judgment
    and Yeager appealed again. 
    Id. {¶18} On
    appeal, the trial court analyzed the issues raised under a
    Civ.R. 60(B) framework but then went into a law of the case/res judicata
    analysis, noting the intervening Schwartzwald decision that was released
    after the briefs had been filed. 
    Id. at ¶
    8-13. The court construed Yeager’s
    arguments on appeal as challenging the banks’ standing. 
    Id. at ¶
    16. As
    such, the court held neither res judicata nor the law of the case doctrine
    barred consideration of the argument on appeal. 
    Id. Nonetheless, however,
    the court overruled Yeager’s argument on the merits, holding the bank had
    established standing to sue at the trial court level. 
    Id. at ¶
    17-19. The court
    further held that Yeager’s additional argument, “inasmuch as [it did not]
    affect Appellee’s standing to bring suit and invoke the jurisdiction of the
    trial court,” was barred by res judicata because it was “an argument that
    should have been and could have been previously raised.” 
    Id. at ¶
    20.
    {¶19} Similar but not identical issues were addressed in Chemical
    Bank, N.A. v. Krawczyk, et al., 8th Dist. Cuyahoga No. 98263, 2013-Ohio-
    Scioto App. No. 13CA3564                                                     15
    3614. In Krawczyk, summary judgment in favor of the bank was granted
    and Krawczyk did not file an appeal. 
    Id. at ¶
    5. Two months later,
    Krawczyk filed a Civ.R. 60(B) motion for relief from judgment, arguing the
    bank lacked standing. 
    Id. at ¶
    6. The motion was denied by the trial court
    and Krawczyk filed an appeal from the denial of the motion, again arguing
    the bank lacked standing. 
    Id. at ¶
    9. The appellate court, however, found no
    merit in Krawczyk’s argument, affirming the trial court’s decision finding
    the bank demonstrated standing below, and noting that Krawczyk was
    attempting to use “a motion for relief from judgment as a substitute for a
    timely filed appeal.” 
    Id. at ¶
    10.
    {¶20} Noting Krawczyk had failed to initially appeal, the court noted
    “a defendant’s relief from final judgment is to timely file an appeal.” 
    Id. at ¶
    17. As the issue of standing was directly litigated in the trial court and
    Krawczyk failed to appeal that decision, the court held Krawczyk’s
    arguments were barred by res judicata. 
    Id. at ¶
    22. In reaching its decision,
    the court distinguished the situation from the facts in Schwartzwald. 
    Id. at ¶
    23. Specifically, the court commented that, even with respect to the issue of
    standing, saying the issue of standing can be raised at any time does not
    equate to “the issue of standing can be raised many times.” 
    Id. at ¶
    29.
    Scioto App. No. 13CA3564                                                           16
    Finally, the Krawczyk court noted as follows regarding the holding in
    Yeager:
    “The lead opinion in Yeager affirms the decision based on a
    Civ.R. 60(B) analysis, the concurring-in-judgment-only opinion
    affirms based on res judicata, and the dissent would reverse the
    trial court’s decision and allow the appellants the opportunity to
    challenge the assignment of the note and/or mortgage.”
    Krawczyk at ¶ 30, FN. 4.
    Clearly, Yeager was a divided decision. However, the division of the court
    in that case illustrates the varied bases for the decisions issued in response to
    these types of issues, and the number of legal grounds that are implicated
    when a case comes before a court with such a procedural history.
    {¶21} Based upon the foregoing, we conclude that the trial court’s
    actions in vacating its prior decisions were inconsistent with this Court’s
    appellate jurisdiction in affirming those decisions previously on appeal.
    Further, as this Court did not remand the case to the trial court after our
    affirmance on appeal, and the reasons advanced in support of the motion to
    vacate did not raise the issue of standing or otherwise invoke the jurisdiction
    of the trial court, the trial court was divested of jurisdiction to consider the
    Scioto App. No. 13CA3564                                                                               17
    parties’ motions to vacate and/or for relief from judgment.3 As the trial
    court lacked jurisdiction to vacate its prior orders, it exceeded its jurisdiction
    in doing so.
    {¶22} Accordingly, the decision of the trial court vacating American’s
    original grant of summary judgment and decree in foreclosure, as well the
    decision granting American’s renewed motion for summary judgment is
    reversed. Further, we find, in accordance with our prior decision rendered in
    American Savings Bank, fsb, et al. v. Carl E. Pertuset, et al., 4th Dist. Scioto
    No. 11CA3442, 2013-Ohio-566, that the original grant of summary
    judgment and decree in foreclosure stands valid as the law of the case, as
    affirmed once already by this Court.
    JUDGMENT REVERSED.
    3
    Although Appellee’s motion below was not expressly titled as a Civ.R. 60(B) motion below, it was for all
    intents and purposes a Civ.R. 60(B) motion and we treat it as such.
    Scioto App. No. 13CA3564                                                       18
    JUDGMENT ENTRY
    It is ordered that the JUDGMENT BE REVERSED and Appellants
    recover costs from Appellee.
    The Court finds there were reasonable grounds for this appeal.
    It is ordered that a special mandate issue out of this Court directing
    the Scioto County Common Pleas Court to carry this judgment into
    execution.
    Any stay previously granted by this Court is hereby terminated as of
    the date of this entry.
    A certified copy of this entry shall constitute the mandate pursuant to
    Rule 27 of the Rules of Appellate Procedure.
    Abele, P.J. & Hoover, J.: Concur in Judgment and Opinion.
    For the Court,
    BY: ___________________________________
    Matthew W. McFarland, Judge
    NOTICE TO COUNSEL
    Pursuant to Local Rule No. 14, this document constitutes a final
    judgment entry and the time period for further appeal commences from
    the date of filing with the clerk.
    

Document Info

Docket Number: 13CA3564

Judges: McFarland

Filed Date: 3/27/2014

Precedential Status: Precedential

Modified Date: 10/30/2014