Souders v. U.S. Bank Natl. Assn. ( 2023 )

[Cite as Souders v. U.S. Bank Natl. Assn., 2023-Ohio-4709.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
UNION COUNTY
CHRISTOPHER JASON SOUDERS,
CASE NO. 14-23-15
PLAINTIFF-APPELLANT,
v.
U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE, ET AL., OPINION
DEFENDANTS-APPELLEES.
Appeal from Union County Common Pleas Court
Trial Court No. 2022-CV-0210
Judgment Affirmed
Date of Decision: December 26, 2023
APPEARANCES:
Christopher Jason Souders, Appellant
Matthew J. Richardson for Appellees
Case No. 14-23-15
WILLAMOWSKI, J.
{¶1} Plaintiff-appellant Christopher J. Souders (“Souders”) appeals the
judgment of the Union County Court of Common Pleas, arguing that the trial court
erred in granting the 12(B)(6) motion to dismiss filed by U.S. Bank National
Association (“USB”) and that a fraud was perpetrated on the court. For the reasons
set forth below, the judgment of the trial court is affirmed.
Facts and Procedural History
{¶2} Steven Bahr (“Bahr”) took out a mortgage on a residential property in
Union County, Ohio. On Bahr’s passing in 2016, this property transferred on death
to Marla Cotton (“Cotton”). On March 12, 2020, USB filed a foreclosure action on
this property. On March 10, 2021, Cotton transferred this property to her son,
Souders, via a quitclaim deed. On March 9, 2022, this property was sold at a judicial
sale. See U.S. Bank National Association v. Cotton, 3d Dist. Union No. 14-22-08,
2022-Ohio-2998, ¶ 2.
{¶3} On December 9, 2022, Souders filed a pro se quiet title action against
USB, seeking a “declaration that * * * [he was] the 100% owner of the subject
property.” (Doc. 1). On January 9, 2023, USB filed a Civ.R. 12(b)(6) motion to
dismiss the complaint. USB argued that, since a foreclosure action had been
initiated against the property Cotton transferred to Souders, he took title subject to
the outcome of that proceeding pursuant to lis pendens. USB also argued that res
-2-
Case No. 14-23-15
judicata prevented Souders from challenging the validity of the completed
foreclosure action. On March 28, 2023, the trial court granted USB’s motion to
dismiss.
{¶4} Souders filed his notice of appeal on April 25, 2023. On appeal, he
raises the following eight assignments of error:
First Assignment of Error
The Common Pleas Court of Union County, Ohio and Don W.
Fraser, Judge of said Court, committed gross error by entering
judgment, dismissing Appellant’s quiet Title action, completely
failing to apply the principles of law and equity.
Second Assignment of Error
The Common Pleas Court of Union County, Ohio and Don W.
Fraser, Judge of said Court, committed gross error by entering
judgment, dismissing Appellant’s quiet Title action, completely
ignoring Appellant’s Verified Complaint.
Third Assignment of Error
The Common Pleas Court of Union County, Ohio and Don W.
Fraser, Judge of said Court, committed gross error by entering
judgment, dismissing Appellant’s quiet Title action, completely
ignoring Appellant’s Preservation of Interest.
Fourth Assignment of Error
The Common Pleas Court of Union County, Ohio and Don W.
Fraser, Judge of said Court, committed gross error by entering
judgment, dismissing Appellant’s quiet Title action, completely
ignoring Appellant’s demand for trial by jury.
-3-
Case No. 14-23-15
Fifth Assignment of Error
The Common Pleas Court of Union County, Ohio and Don W.
Fraser, Judge of said Court, committed gross error by entering
judgment, dismissing Appellant’s quiet Title action, by
improperly granting defendant’s 12(B)(6) motion.
Sixth Assignment of Error
The Common Pleas Court of Union County, Ohio and Don W.
Fraser, Judge of said Court, committed gross error by entering
judgment, dismissing Appellant’s quiet Title action, denying
Appellant’s right to due process of law.
Seventh Assignment of Error
The Common Pleas Court of Union County, Ohio and Don W.
Fraser, Judge of said Court, committed plain error by entering
judgment, dismissing Appellant’s quiet Title action.
Eighth Assignment of Error
The Common Pleas Court of Union County, Ohio and Don W.
Fraser, Judge of said Court, committed fraud on the Court.
Because the first seven assignments of error challenge the trial court’s decision to
grant USB’s Civ.R. 12(B)(6) motion to dismiss, we will consider these in one
analysis before proceeding to the eighth assignment of error.
First through Seventh Assignments of Error
{¶5} Souders asserts that his quiet title action should not have been dismissed
pursuant to Civ.R. 12(B)(6) by the trial court.
-4-
Case No. 14-23-15
Standard of Review
{¶6} A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim upon
which relief can be granted tests the sufficiency of the complaint. Pearsall v.
Guernsey, 2017-Ohio-681, 86 N.E.3d 69, ¶ 8 (3d Dist.). For a Civ.R. 12(B)(6)
dismissal to be proper, there must be no doubt that the plaintiff cannot prove a set
of facts to establish the plaintiff’s claim or entitle the plaintiff to relief. Lima
Refining Company v. Linde Gas North America, LLC, 3d Dist. Allen No. 1-22-08,
2022-Ohio-2185, ¶ 9. “An appellate court reviews a trial court’s decision to grant
a Civ.R. 12(B)(6) motion de novo.” Strahm v. Kagy, 3d Dist. Allen No. 1-17-08,
2017-Ohio-4220, ¶ 7. In this process, courts must consider the allegations in the
complaint as true and must construe any reasonable inferences from the complaint
in favor of the nonmoving party. Faber v. Seneca County Sheriff’s Dept., 2018-
Ohio-786, 108 N.E.3d 213, ¶ 7 (3d Dist.).
Legal Standard
{¶7} The doctrine of lis pendens exists to “maintain[] the status quo of rights
and interests in property involved in litigation, not only between parties thereto but
as to third parties having conflicting interests, until the action pending has been
finally adjudicated.” Cook v. Mozer, 108 Ohio St. 30, 140 N.E. 590 (1923), at
syllabus. In Ohio, the doctrine of lis pendens is codified in R.C. 2703.26:
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
-5-
Case No. 14-23-15
acquired by third persons in the subject of the action, as 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, 892 N.E.3d 937, ¶ 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.’” [Bates at ¶ 16], quoting Gaul v.
Burks Dev. Corp., 8th Dist. [Cuyahoga] No. 70713[, 1997 WL 35562,
*2] (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[, 140 N.E. 590] (1923).
Woods Cove III, LLC v. Straight, 10th Dist. Franklin No. 17AP-340, 2018-Ohio-
2906, ¶ 18. “In Ohio, a foreclosure proceeding is considered pending through the
final decree and until the interest in the property in question has been foreclosed and
the property sold.” Buckner v. Bank of New York, 12th Dist. Clermont No. CA2013-
07-053, 2014-Ohio-568, ¶ 31.
{¶8} Further, the doctrine of res judicata exists to ensure the finality of
judgments and “encompasses the two related concepts of claim preclusion * * * and
issue preclusion * * *.” O’Nesti v. DeBartolo Realty Corp., 113 Ohio St.3d 59,
2007-Ohio-1102, 862 N.E.3d 59, ¶ 6.
-6-
Case No. 14-23-15
Claim preclusion prevents subsequent actions, by the same parties or
their privies, based upon any claim arising out of a transaction that
was the subject matter of a previous action. * * * Where a claim could
have been litigated in the previous suit, claim preclusion also bars
subsequent actions on that matter. * * *
Issue preclusion, on the other hand, serves to prevent relitigation of
any fact or point that was determined by a court of competent
jurisdiction in a previous action between the same parties or their
privies. * * * Issue preclusion applies even if the causes of action
differ. * * *
(Citations omitted.) Id. at ¶ 6-7. A party is a privy of “another if he succeeds to an
estate or interest formerly held by the other * * *.” Metalworking Machinery Co.,
Inc. v. Fabco, Inc., 17 Ohio App.3d 91, 92, 477 N.E.2d 634, (3d Dist. 1984), quoting
32 Ohio Jurisprudence 2d 12, Judgments, Section 248 (1984).
Legal Analysis
{¶9} In Buckner v. Bank of New York, the Twelfth District Court of Appeals
considered a case that is factually similar to the one presently before us. In that
case, the Bank of New York sought to foreclose on a mortgage that had been
executed by James Blanton (“Blanton”). Buckner, supra, at ¶ 2. During the
pendency of that proceeding, Blanton transferred title to the subject property to
Lorin Buckner (“Buckner”) via a quitclaim deed. Id. at ¶ 4. Buckner filed a
complaint that sought to quiet title in the property.1 Id. at ¶ 5. In response, the Bank
1
Blanton appealed the initial foreclosure action. Buckner, supra, at ¶ 4. After a decision was rendered by
the appellate court, a sheriff’s sale of the property was scheduled for January 8, 2013. Id. Buckner filed this
complaint to quiet title on December 31, 2012. Id. While he filed this complaint before the sheriff’s sale,
his motion to dismiss was decided after the property was disposed of at the sheriff’s sale. Id. at ¶ 8.
-7-
Case No. 14-23-15
of New York filed a motion to dismiss. Id. The trial court granted this motion,
finding in part that lis pendens and res judicata barred Buckner’s claims. Id. at ¶ 8.
{¶10} On appeal, the Twelfth District held that, pursuant to the doctrine of
lis pendens, Buckner was “a third-party who obtained an interest in the property at
his peril during the pendency of the foreclosure action” and was, therefore, “bound
by the trial court’s foreclosure entry and the sale of the property.” Buckner, supra,
at ¶ 32. The Twelfth District also held that Buckner was in privity with Blanton and
that the doctrine of res judicata, therefore, operated to bar any claims that could have
been raised in the prior foreclosure action. Id. at ¶ 40-41. Finding the Twelfth
District’s reasoning to be persuasive, we apply the logic of the Buckner decision to
the facts presently before us.
{¶11} In this case, Souders filed a quiet title action, asserting that he “is the
100% owner of the subject property.” (Doc. 1). R.C. 5303.01 provides for quiet
title actions and reads, in its relevant part, as follows:
An action may be brought by a person in possession of real property,
by himself or tenant, against any person who claims an interest therein
adverse to him, for the purpose of determining such adverse interest.
Such action may be brought also by a person out of possession,
having, or claiming to have, an interest in remainder or reversion in
real property, against any person who claims to have an interest
therein, adverse to him, for the purpose of determining the interests of
the parties therein.
R.C. 5303.01. “Quiet title actions are generally used to remove a cloud on one’s
title to real property * * *.” Wilk v. Discover Bank, 2019-Ohio-3842, 144 N.E.3d
-8-
Case No. 14-23-15
1023, ¶ 43 (11th Dist.). However, under the legal doctrines of lis pendens and res
judicata, the allegations that Souders raises in his complaint cannot establish that he
currently has an interest in the property at issue.
{¶12} In his complaint, Souders’s states that he initially obtained an interest
in the property at issue when Cotton transferred title to him via a quitclaim deed.
See Buckner, supra, at ¶ 23, quoting Welsh v. Estate of Cavin, 10th Dist. Franklin
No. 02AP-1328, 2004-Ohio-62, ¶ 30 (“A quitclaim deed conveys no more than
whatever title the grantor held at the time of granting the deed.”). He then alleges
that this property had been subject to a foreclosure proceeding for roughly one year
by the time Cotton had transferred title to him. Souders further avers that this
foreclosure proceeding concluded with a judicial sale of this property.
{¶13} These allegations establish that, pursuant to lis pendens, Souders was
“a third-party who obtained an interest in the property at his peril during the
pendency of the foreclosure action” and was, therefore, “bound by the trial court’s
foreclosure entry and the sale of the property.” Buckner, supra, at ¶ 32. In other
words, the complaint indicates that the interest he received from Cotton was
disposed of at a judicial sale. These allegations do not establish that the title he
received from Cotton gives him a current claim to an interest in the property at issue.
See Id. at ¶ 32-36.
{¶14} Further, Souders never alleges that he had any interest in the property
outside of what Cotton had conveyed to him or identifies any other interest that he
-9-
Case No. 14-23-15
had in the property that could have survived a foreclosure proceeding. Rather, his
claim to be “100% owner” of the property rests on several allegations that challenge
Bahr’s mortgage as being invalid and “unenforceable.” (Doc. 1). In other words,
he is arguing that the completed foreclosure proceeding was invalid and that the title
he received from Cotton to the entire property is, therefore, still valid. Thus, his
claim to an interest in the property ultimately reduces down to challenging the
completed foreclosure proceeding.
{¶15} In this case, no party disputes that the Bahr’s mortgage was the subject
of a foreclosure action that resulted in a final judgment on the merits and a judicial
sale of the property. Buckner, supra, at ¶ 39. His complaint only raises claims or
issues that could have been previously addressed in the now completed foreclosure
action or that would have necessarily been decided in this completed foreclosure
action. Id. at ¶ 40-41. Further, while Souders notes that he was not a party to this
prior proceeding, the allegations in his complaint establish that he was a privy of
Cotton because he succeeded her in title to the property. Id. Thus, the doctrine of
res judicata operates to bar the challenges that he raises to the completed foreclosure
action. Id. at ¶ 40-44. See also Estate of Williams v. Deutsche Bank Trust Co. Am.,
8th Dist. Cuyahoga No. 90967, 2008-Ohio-3981, ¶ 26-27.
{¶16} Pursuant to the doctrine of lis pendens, the only interest that Souders
alleges to have in the property at issue was disposed of through a completed
foreclosure proceeding. Further, the challenges he raises to this completed
-10-
Case No. 14-23-15
foreclosure proceeding are barred by the doctrine of res judicata. Since Souders has
not pled any facts that could establish that he is entitled to the relief offered by a
quiet title action, the trial court did not err in granting USB’s motion to dismiss.
Accordingly, his first seven assignments of error are overruled.
Eighth Assignment of Error
{¶17} Citing to Civ.R. 60(B), Souders asserts that the result of the instant
proceeding constitutes a fraud perpetrated on the court.
Legal Standard
{¶18} “A court may grant relief under Civ.R. 60(B)(5), the so-called ‘catch-
all’ provision, only in those extraordinary and unusual cases where the moving party
demonstrates substantial grounds warranting relief from judgment.” Roubanes Luke
v. Roubanes, 2018-Ohio-1065, 109 N.E.3d 671, ¶ 22 (10th Dist.). “Such substantial
grounds exist if the moving party establishes a fraud upon the court.” Id.Fraud upon the court is an ‘elusive concept.’ Coulson [v. Coulson, 5
Ohio St.3d 12, 448 N.E.2d 809 (1983)]. Nevertheless, the Ohio
Supreme Court has cited one commentator’s definition with approval:
‘Fraud upon the court’ should, we believe, embrace only that species
of fraud which does or attempts to, defile the court itself, or is a fraud
perpetrated by the officers of the court so that the judicial machinery
can not perform in the usual manner its impartial task of adjudging
cases that are presented for adjudication.’ Id., quoting 7 Moore,
Federal Practice (2d Ed. 1971) 515, ¶ 60.33.
Mancz v. Henry, 2d Dist. Greene No. 2022-CA-20, 2022-Ohio-3256, ¶ 26.
-11-
Case No. 14-23-15
Legal Analysis
{¶19} While Souders directs our attention to Civ.R. 60(B), we note that this
appeal does not arise from a motion for relief from judgment filed pursuant to that
provision. But even if Souders had filed a Civ.R. 60(B) motion, he has not identified
any facts that would establish that a fraud was perpetrated on the court. He only
asserts that the trial court made no reference to equity in this case. Souders has not
identified any legal authority to support the assertion that this alleged error could
constitute a fraud upon the court in this case. See App.R. 12(A)(2). In the absence
of such a showing, his eighth assignment of error is overruled.
Conclusion
{¶20} Having found no error prejudicial to the appellant in the particulars
assigned and argued, the judgment of the Union County Court of Common Pleas is
affirmed.
Judgment Affirmed
WALDICK and ZIMMERMAN, J.J., concur.
/hls
-12-