Straight v. Levy , 2018 Ohio 2906 ( 2018 )

[Cite as Straight v. Levy, 2018-Ohio-2906.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Woods Cove III, LLC, :
Plaintiff-Appellee, :
No. 17AP-340
v. : (C.P.C. No. 14CV-2759)
Harriet Straight, : (REGULAR CALENDAR)
Defendant-Appellant, :
Robert K. Levy et al., :
Defendants-Appellees. :
D E C I S I O N
Rendered on July 24, 2018
On brief: Moore & Yaklevich, and John A. Yaklevich, for
appellant. Argued: John A. Yaklevich.
On brief: Lane Alton & Horst LLC, Dennis J. Morrison,
Jeffrey J. Madison, and Christopher B. Burch, for appellee
PNC Bank National Association. Argued: Christopher B.
Burch.
APPEAL from the Franklin County Court of Common Pleas
BROWN, P.J.
{¶ 1} Harriet Straight, defendant-appellant, appeals from the following four
judgments of the Franklin County Court of Common Pleas: (1) a March 30, 2017 decision
and entry granting in part the February 16, 2017 amended motion for relief from
judgment filed by PNC Bank National Association ("PNC"), and denying appellant's
February 13, 2017 motion to intervene, (2) an April 11, 2017 amended judgment entry and
decree of foreclosure, (3) an April 18, 2017 amended judgment entry confirming sale and
No. 17AP-340 2
ordering deed and distribution, and (4) an April 26, 2017 order and judgment entry
granting PNC's motion for an order instructing the clerk of courts to release funds.
{¶ 2} On March 13, 2014, Woods Cove III, LLC ("Woods Cove"), the holder of two
tax lien certificates, filed a complaint in foreclosure in the trial court on certain property,
namely, 225 Fairway Boulevard, Columbus, Ohio 43213, owned by Robert K. Levy,
defendant-appellee. The complaint also named as defendants the Franklin County
Treasurer, Ohio Department of Taxation, the Internal Revenue Service, PNC, and any
unknown spouse of Levy. PNC was the holder of two mortgages on the property, but
Woods Cove omitted one of the mortgages from its pleadings. Woods Cove served the
complaint on a local branch of PNC. PNC did not respond to the foreclosure complaint.
On May 21, 2015, the trial court issued a judgment entry and decree of foreclosure, in
which it found PNC was in default of answer.
{¶ 3} On April 27, 2016, appellant obtained a money judgment against Levy, as
well as others, in an unrelated complaint-on-cognovit-note action. On May 11, 2016,
appellant obtained a certificate of judgment lien against Levy in that case.
{¶ 4} On October 7, 2016, the property was sold at sheriff's sale.
{¶ 5} On November 10, 2016, appellant filed a complaint for a creditor's bill
against Levy to enforce her judgment against any net foreclosure sale proceeds in the
present case. In the creditor's bill action, appellant and Levy entered into an agreed order
on November 18, 2016, in which Levy agreed to an order that commanded the clerk of
courts to hold the net foreclosure proceeds pending orders from that court. On
November 29, 2016, the trial court entered the same agreed order as an order of the court.
{¶ 6} The sale of the subject property was confirmed on November 22, 2016.
However, PNC's unknown lien was not released on the sale of the property. Woods Cove
was paid from the proceeds of the sale. There remained proceeds from the sale, and the
clerk of courts held those pending further orders of the court.
{¶ 7} On November 25, 2016, appellant filed a motion for leave to intervene,
seeking to obtain satisfaction of the money judgment from the excess sale proceeds held
by the clerk of courts in the foreclosure action.
{¶ 8} On December 16, 2016, the IRS filed a motion requesting distribution of
funds from the clerk of courts and the trial court subsequently granted the motion.
No. 17AP-340 3
{¶ 9} On January 5, 2017, the trial court denied appellant's motion to intervene.
{¶ 10} On February 3, 2017, PNC filed a motion for relief from judgment, pursuant
to Civ.R. 60(B)(5), seeking to set aside the default judgment and claim the excess
proceeds based on its two mortgages. PNC then filed a motion to distribute funds held by
the clerk of courts.
{¶ 11} On February 13, 2017, appellant filed a second motion to intervene. On
February 16, 2017, PNC filed an amended Civ.R. 60(B) motion for relief from judgment
regarding the May 21, 2015 default judgment.
{¶ 12} On March 30, 2017, the trial court denied appellant's second motion to
intervene finding the doctrine of lis pendens prevented appellant from obtaining an
interest in the property after the foreclosure complaint was filed March 13, 2014. The trial
court also granted PNC's Civ.R. 60(B) motion.
{¶ 13} On April 11, 2017, the court issued an amended decree of foreclosure and,
on April 18, 2017, the court issued an amended confirmation of sale. On April 26, 2017,
the trial court instructed the clerk of courts to release $62,726.47 of the sale proceeds to
PNC. Appellant appeals the following four judgments of the trial court: (1) the March 30,
2017 decision and entry granting in part PNC's February 16, 2017 amended motion for
relief from judgment, and denying appellant's February 13, 2017 motion to intervene,
(2) the April 11, 2017 amended judgment entry and decree of foreclosure, (3) the April 18,
2017 amended judgment entry confirming sale and ordering deed and distribution, and
(4) the April 26, 2017 order and judgment entry granting PNC's motion for an order
instructing the clerk of courts to release funds. Appellant asserts the following assignment
of error:
THE TRIAL COURT ERRED IN ITS DECISIONS DENYING
APPELLANT'S FEBRUARY 13, 2017 MOTION FOR LEAVE
TO INTERVENE, SUSTAINING APPELLEE PNC BANK'S
RULE 60(B) MOTION, AND ORDERING DISTRIBUTION
OF THE CLERK'S OFFICE FUNDS TO APPELLEE PNC
BANK.
{¶ 14} In her single assignment of error, appellant argues the trial court erred
when it denied appellant's motion for leave to intervene in order to dispute PNC's Civ.R.
60(B) motion, sustained PNC's Civ.R. 60(B) motion, and ordered distribution of the
remaining foreclosure sale proceeds to PNC. Appellant claims she held a first and best lien
No. 17AP-340 4
on the property. Because we find the trial court did not err in its March 30, 2017 judgment
when it denied appellant's second motion to intervene, and this determination is
dispositive of the entire appeal, we address that judgment first.
{¶ 15} Civ.R. 24(A) provides, in pertinent part:
Intervention of right. 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.
{¶ 16} Appellate courts review a decision granting or denying a motion to
intervene for an abuse of discretion. State ex rel. N.G. v. Cuyahoga Cty. Court of
Common Pleas, 147 Ohio St.3d 432, 2016-Ohio-1519, ¶ 21.
{¶ 17} Here, in denying appellant's motion to intervene, the trial court found in its
March 30, 2017 judgment:
[Appellant] has absolutely no grounds upon which to
challenge PNC's motion. As evidenced by [appellant's]
previous motion, she did not obtain her judgment against Mr.
Levy until April 27, 2016. This is well after the filing of the
present case and the Court's May 21, 2015 final judgment
entry. At the time this action was filed Lis Pendens attached to
the property, which prevented any further liens from being
placed upon it. Due to this, [appellant] has no greater rights to
the excess proceeds of the sale of the property than Mr. Levy
has. Mr. Levy is far behind PNC in line for the excess sale
proceeds. * * * Just because [appellant] has a judgment
against Mr. Levy, that does not mean she has any rights in this
action.
This brings the Court to [appellant's] Motion to Intervene.
While the Court sympathizes with [appellant's] situation, she
is just an unsecured creditor. When all is said and done, she
has no lien on the property that is the subject of this matter
and has no claim to the excess proceeds from its sale.
{¶ 18} Ohio's lis pendens statute provides as follows: "When a complaint is filed,
the action is pending so as to charge a third persons with notice of its pendency. While
pending, no interest can be acquired by third persons in the subject of the action, as
No. 17AP-340 5
against the plaintiff's title." R.C. 2703.26. "Lis pendens prevents third parties who claim
to have 'acquired an interest' in the property, after service and during the pendency of the
foreclosure action, from challenging the trial court's judgment." Bates v. Postulate
Invests., L.L.C., 176 Ohio App.3d 523, 2008-Ohio-2815, ¶ 16 (8th Dist.). While the
doctrine does not prevent persons from transacting an interest in the property during the
pending lawsuit, it "places any such conveyed interest at risk and notifies the parties that
they 'are bound by the decree and sale thereunder.' " Id., quoting Gaul v. Burks Dev.
Corp., 8th Dist. No. 70713 (Jan. 30, 1997). Thus, one who acquires an interest in the
property during the pending lawsuit "takes subject to the judgment or decree, and is as
conclusively bound by the result of the litigation as if he had been a party thereto from the
outset." Cook v. Mozer, 108 Ohio St. 30, 36 (1923). "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." Bank of New York v. Barclay, 10th Dist. No.
03AP-844, 2004-Ohio-1217, ¶ 10. Lis pendens "maintain[s] the status quo of rights and
interests in property involved in litigation, not only as between the parties thereto but as
to third parties having conflicting interests, until the action pending has been finally
adjudicated." Mozer at syllabus.
{¶ 19} However, we need not determine whether lis pendens applies to this case, as
the court relied on. Instead, we focus on appellant's argument on appeal. In her appellate
brief, appellant's entire argument is based on the creditor's bill action she filed on
November 10, 2016. "[A] creditor's bill is an action in equity by which a judgment creditor
seeks to subject an interest of the judgment debtor that cannot be reached on execution to
the payment of the creditor's existing judgment." In re Estate of Mason, 109 Ohio St.3d
532, 2006-Ohio-3256, ¶ 18; Olive Branch Holdings v. Smith Technology Dev., LLC, 181
Ohio App.3d 479, 2009-Ohio-1105, ¶ 25 (10th Dist.) (explaining that a creditor's bill
enables a judgment creditor to secure a lien on those assets of the judgment debtor that
mere execution of the judgment at law cannot reach). The creditor's bill action originated
as a common-law remedy, but was codified into the creditor's bill statute, R.C. 2333.01,
which provides:
When a judgment debtor does not have sufficient personal or
real property subject to levy on execution to satisfy the
No. 17AP-340 6
judgment, any equitable interest which he has in real estate as
mortgagor, mortgagee, or otherwise, or any interest he has in
a banking, turnpike, bridge, or other joint-stock company, or
in a money contract, claim, or chose in action, due or to
become due to him, or in a judgment or order, or money,
goods, or effects which he has in the possession of any person
or body politic or corporate, shall be subject to the payment of
the judgment by action.
{¶ 20} Under this statute, a judgment creditor must prove three elements to
succeed in a creditor's bill action: (1) the existence of a valid judgment against the debtor,
(2) the existence of an interest of the type enumerated in the statute, and (3) the debtor's
lack of sufficient personal or real property to satisfy the judgment. Waterfield Fin. Corp.
v. Gilmer, 10th Dist. No. 04AP-252, 2005-Ohio-1004, ¶ 29; Huntington Ctr. Assocs. v.
Schwartz, Warren & Ramirez, L.L.C., 10th Dist. No. 00AP-35 (Sept. 26, 2000).
{¶ 21} In the present case, appellant asserts on appeal that she is entitled to the
funds being held by the clerk of courts because she secured a first and best lien on those
funds via her November 10, 2016 creditor's bill action after PNC's mortgages were
terminated and cancelled by default judgment on May 21, 2015. Appellant claims her
November 10, 2016 creditor's bill complaint acted as a judgment lien against the funds as
of the time of filing. She contends her lien took priority over creditors without specific
liens on the property as of that time, and PNC had no lien on the property as of the date of
her creditor's bill action. She argues she was entitled to intervene in the foreclosure action
because the funds being held by the clerk of courts in that action were subject to her
creditor's bill lien.
{¶ 22} We must reject appellant's claim that she was entitled to intervene because
she has priority over PNC's liens based on her creditor's bill action. In reviewing
appellant's appeal, this court examined the pleadings filed in the creditor's bill action and
discovered there have been subsequent pleadings filed in that action since the time of the
filing of this appeal and oral arguments. We invoke the principle of judicial notice.
Pursuant to Evid.R. 201(B), a judicially noticed fact must be one not subject to reasonable
dispute in that it is either: (1) generally known within the territorial jurisdiction of the trial
court, or (2) capable of accurate and ready determination by resort to sources whose
accuracy cannot reasonably be questioned. A court may take judicial notice, whether
No. 17AP-340 7
requested or not. Evid.R. 201(C). The Supreme Court of Ohio has found that a court may
sua sponte take judicial notice of certain relevant facts. Disciplinary Counsel v. Sargeant,
118 Ohio St.3d 322, 2008-Ohio-2330, ¶ 22; Pankey v. Court of Common Pleas, 7th Dist.
No. 11 MA 29, 2011-Ohio-4258 (taking judicial notice of docket entries of subsequent
filings in a common pleas declaratory judgment action, which was the subject of a
mandamus action before the court of appeals). " ' "A court may take judicial notice of a
document filed in another court 'not for the truth of the matters asserted in the other
litigation, but rather to establish the fact of such litigation and related filings." ' " State ex
rel. Coles v. Granville, 116 Ohio St.3d 231, 2007-Ohio-6057, ¶ 20, quoting Liberty Mut.
Ins. Co. v. Rotches Pork Packers, Inc., 969 F.2d 1384, 1388 (2d Cir.1992), quoting
Kramer v. Time Warner, Inc., 937 F.2d 767, 774 (2d Cir.1991).
{¶ 23} We take judicial notice of appellant's filing in her creditor's bill action of a
November 10, 2017 notice of dismissal of her action pursuant to Civ.R. 41(A). Appellant's
dismissal of her creditor's bill action completely undermines her argument on appeal as to
why she is entitled to intervene in the foreclosure action. As explained above, appellant
relies solely on the creditor's bill action to claim she was entitled to intervene because she
had priority over PNC. She has now dismissed that action, and no final judgment on the
merits was ever rendered in that case. Therefore, she can no longer rely on that action as
the alleged source of her priority over the funds being held by the clerk of courts. For this
reason, we must reject appellant's argument that she was entitled to intervene because her
creditor's bill action gave her priority over PNC.
{¶ 24} Given our determination that appellant has no basis to intervene in this case
as a consequence of her dismissal of her creditor's bill action, we do not address
appellant's arguments relating to the trial court's granting of PNC's motion for relief from
judgment, the amended judgment entry and decree of foreclosure, amended judgment
entry confirming sale and ordering deed and distribution, and order and judgment entry
granting PNC's motion for an order instructing the clerk of courts to release funds. Having
been properly denied intervention, appellant was not a party to the action and had no
standing to contest any of these orders. Furthermore, as the Supreme Court and this court
have found, a non-party who seeks intervention under Civ.R. 24 and is denied
intervention may appeal only the issue of intervention. N.G. at ¶ 28, citing State ex rel.
No. 17AP-340 8
Sawicki v. Court of Common Pleas, 121 Ohio St.3d 507, 2009-Ohio-1523, ¶ 18 ("[i]t is well
settled that 'an appeal from the denial of a motion to intervene is limited solely to the
issue of intervention' "), quoting State ex rel. Montgomery v. Columbus, 10th Dist. No.
02AP-963, 2003-Ohio-2658, ¶ 33; Tomrob, Inc. v. Cuyahoga Metro. Hous. Auth., 8th
Dist. No. 71593 (Sept. 11, 1997) (appeal from denial of a motion to intervene is limited
solely to the issue of intervention, not the merits of the underlying appeal), and Fouche v.
Denihan, 66 Ohio App.3d 120, 126 (10th Dist.1990). As a non-party, appellant lacks
standing to challenge the trial court's determination on the merits. For all of the foregoing
reasons, we overrule appellant's single assignment of error.
{¶ 25} Accordingly, appellant's single assignment of error is overruled, and the
judgments of the Franklin County Court of Common Pleas are affirmed.
Judgments affirmed.
SADLER and LUPER SCHUSTER, JJ., concur.
____________________