Marietta v. Verhovec , 2024 Ohio 1184 ( 2024 )

[Cite as Marietta v. Verhovec, 2024-Ohio-1184.]
COURT OF APPEALS
TUSCARAWAS COUNTY, OHIO
FIFTH APPELLATE DISTRICT
CITY OF MARIETTA JUDGES:
Hon. Patricia A. Delaney, P.J.
Plaintiff-Appellee Hon. William B. Hoffman, J.
Hon. John W. Wise, J.
-vs-
Case Nos. 2023 AP 07 0043 &
2023 AP 07 0044
EDWARD VERHOVEC, SR., ET AL.,
Defendants-Appellants OPINION
CHARACTER OF PROCEEDINGS: Appeal from the Tuscarawas County
Court of Common Pleas, Case No. 2021
CF 02 0127
JUDGMENT: Affirmed in part, reversed in part, and
remanded
DATE OF JUDGMENT ENTRY: March 28, 2024
APPEARANCES:
For Defendants-Appellants For Defendant-Appellant
Edward and Dorothy Verhovec Cambridge and MacMillan Property Co.
RICHARD A. NICODEMO WILLIAM E. WALKER, JR.
124 15TH Street, N.W. 333 Erie Street, South #192
Canton, Ohio 44703 Massillon, Ohio 44648
For Plaintiff-Appellee For Defendant-Appellee
City of Marietta The Huntington National Bank
DONALD A. MAUSAR ERIC T. DEIGHTON
ROY J. SCHECHTER Carlisle, McNellie, Rini, Kramer &
965 Keynote Circle Ulrich Co., L.P.A.
Cleveland, Ohio 44131 24755 Chagrin Blvd., Suite 200
Cleveland, Ohio 44122
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 2
For Defendant Tuscarawas
County Treasurer
ROBERT STEPHENSON, II
Tuscarawas County Prosecutor's Office
125 East High Avenue – Room 220
New Philadelphia, Ohio 44663
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 3
Hoffman, J.
{¶1} Defendants-Appellants Edward and Dorothy Verhovec (hereinafter “the
Verhovecs”) and Cambridge and MacMillan Property Company (hereinafter “Cambridge”)
appeal the judgment of foreclosure entered by the Tuscarawas County Common Pleas
Court. Plaintiff-appellee is the City of Marietta, and Defendant-appellee is the Huntington
National Bank.1
STATEMENT OF THE FACTS AND CASE
{¶2} In 2012, Marietta received two judgment against the Verhovecs for frivolous
conduct related to pursuing claims under Ohio’s Public Records Act, R.C. 149.43.2 One
judgment was against Edward Verhovec only, in the amount of $32,974.51. A second
judgment was rendered against both of the Verhovecs and their attorney, William Walker,
jointly in the amount of $274,033.49 under R.C. 2323.51, and individually against William
Walker under Civ. R. 11.3 Certificates of judgment liens were filed as to both judgments
in Tuscarawas County in 2014, and refiled in 2021.
{¶3} On September 8, 2017, Marietta filed a motion for a judgment debtors’
examination of the Verhovecs in Tuscarawas County as to its judgment for $274,033.49.
The Tuscarawas County Common Pleas Court entered an order to appear against the
Verhovecs on April 14, 2020.
{¶4} Marietta filed the instant action seeking to foreclose on property owned by
the Verhovecs in Tuscarawas County. In addition to the Verhovecs’ personal residence,
the property includes several rental units. The rent payments from these units are
1 Defendant Tuscarawas County Treasurer has not filed a brief in the instant appeals.
2 The facts underlying the judgments are set forth in State ex rel. Verhovec v. Marietta, 4th Dist. Washington
No. 11CA29, 2013-Ohio-5414.
3Attorney Walker represents Cambridge in the instant appeal.
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 4
assigned to Cambridge pursuant to a recorded assignment of rents. Huntington and
Cambridge both have recorded mortgages on the property filed for record on May 29,
2015, with Huntington’s mortgage being recorded first on that date.
{¶5} Marietta filed a motion for summary judgment. The Verhovecs and
Cambridge also filed motions for summary judgment. In a series of judgment entries, the
trial court granted summary judgment in favor of Marietta. While the trial court found the
judgment lien against Edward Verhovec in the amount of $32,974.51 was validly
recorded, the trial court found the lien was dormant, and ceased to operate as of June 6,
2019. The trial court found Marietta’s judgment lien in the amount of $274,033.49 was
not dormant due to the 2017 debtors’ examination, and such lien was first in priority over
Huntington and Cambridge. The trial court found as a consensual lien, the payment of
Huntington’s mortgage would come from the Verhovecs’ homestead exemption. In the
judgment of foreclosure, the trial court ordered Cambridge’s interest, claim, or lien
transferred to the proceeds of the sale of the property after the payment of costs of the
action, real estate taxes, the amount due Marietta on its first lien, and the amount due
Huntington on its mortgage. The trial court also held any purchaser at judicial sale will
take title to the property subject to the assignment of rents in favor of Cambridge.
{¶6} In the “Order” section of its judgment of foreclosure, the trial court ordered
the proceeds of sale distributed as follows after the payment of costs and taxes: the
Verhovecs’ homestead exemption shall be set aside, after which payment shall be made
to Marietta in the amount $274,033.49 plus interest, and payment shall be made to
Huntington in the amount of $134,835.85 plus interest from the Verhovecs’ homestead
exemption. Any balance was ordered to be held pending further order of the trial court.
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 5
{¶7} It is from the June 30, 2023 judgment of the trial court the Verhovecs
prosecute their appeal (Case No. 2023 AP 07 0043), assigning as error:
I. THE TRIAL COURT ERRED WHEN IT GRANTED THE MOTION
FOR SUMMARY JUDGMENT OF PLAINTIFF-APPELLEE CITY OF
MARIETTA AND DENIED THE CROSS-MOTION FOR SUMMARY
JUDGMENT OF VERHOVECS.
II. THE TRIAL COURT ERRED IN ITS JUDGMENT ENTRY OF
JUNE 30, 2023, WHEREBY IT ORDERED THAT THE VERHOVECS’
EXEMPTION BE SET ASIDE FOR THE PAYMENT OF HUNTINGTON’S
MORTGAGE.
{¶8} It is from the June 30, 2023 judgment of the trial court Cambridge
prosecutes its appeal (Case No. 2023 AP 07 0044), assigning as error:
I. THE TRIAL COURT FAILED TO ACKNOWLEDGE IN THE
SPECIFIC LANGUAGE GRANTING FORECLOSURE THAT CAMBRIDGE
AND MACMILLAN COMPANY HAS A RECORDED MORTGAGE ON THE
PROPERTY.
II. THE TRIAL COURT FAILED TO ACKNOWLEDGE IN THE
SPECIFIC LANGUAGE GRANTING FORECLOSURE THAT CAMBRIDGE
AND MACMILLAN COMPANY HAS A FINAL JUDGMENT ENTITLING IT
TO THE RENTAL INCOME WHICH WAS UNCONTESTED AND DECIDED
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 6
IN CAMBRIDGE AND MACMILLAN PROPERTIES V. CITY OF
MARIETTA, CASE NO. 2019 CV 09 0609 (C.P.CT., DATED 11 19 2019)
(JUDGE O’FARRELL).
III. THE TRIAL COURT ERRED IN GRANTING SUMMARY
JUDGMENT IN FAVOR OF MARIETTA BECAUSE MARIETTA WAS
PRECLUDED FROM SEEKING FORECLOSURE AFTER MARIETTA’S
COUNSEL PERSONALLY REPRESENTED VERHOVECS DID NOT
HAVE SUFFICIENT ASSETS TO SATISFY MARIETTA’S JUDGMENT IN
THE CREDITORS’ BILL ACTION WHICH WAS FILED IN THE COMMON
PLEAS COURT OF WASHINGTON COUNTY, OHIO.
IV. THE TRIAL COURT ERRED BY GRANTING JUDGMENT IN
FAVOR OF MARIETTA WHEN MARIETTA FAILED TO FOLLOW THE
STATUTORY REQUIREMENTS FOR PERFECTING A LIEN BY FAILING
TO FILE ITS WASHINGTON COUNTY JUDGMENT LIEN WITH THE
TUSCARAWAS COUNTY RECORDER’S OFFICE WHERE THE REAL
PROPERTY WAS LOCATED.
{¶9} We first address the assignments of error raised by the Verhovecs.
I.
{¶10} In their first assignment of error, the Verhovecs argue the trial court erred in
granting Marietta’s motion for summary judgment, and denying their motion for summary
judgment.
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 7
{¶11} 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., 30 Ohio St.3d 35, 36 (1987). As such, we must refer to Civ. R.
56(C) which provides in pertinent part:
Summary Judgment shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, written admissions, affidavits,
transcripts of evidence, 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. No evidence
or stipulation may be considered except as stated in this rule. 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.
{¶12} Pursuant to the above rule, a trial court may not enter summary judgment if
it appears 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 demonstrating the absence of a genuine issue of material
fact. The moving party may not make a conclusory assertion the non-moving party has
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 8
no evidence to prove its case. The moving party must specifically point to some evidence
which demonstrates the moving party cannot support its claim. If the moving party
satisfies this requirement, the burden shifts to the non-moving 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, citing Dresher v. Burt, 75 Ohio St.3d 280, 1996-
Ohio-107.
FAILURE TO ESTABLISH ELEMENTS OF FORECLOSURE
{¶13} The Verhovecs first argue the trial court erred in granting summary
judgment in favor of Marietta because Marietta failed to present evidentiary-quality
material to establish the elements of foreclosure as set forth by this Court in Wachovia
Bank of Delaware, N.A. v. Jackson, 5th Dist. Stark No. 2010-CA-00291, 2011-Ohio-3203.
In Wachovia, this Court held:
To sum up, in order to properly support a motion for summary
judgment in a foreclosure action, a plaintiff must present evidentiary-quality
materials showing:
1.) The movant is the holder of the note and mortgage, or is a party
entitled to enforce the instrument;
2.) if the movant is not the original mortgagee, the chain of
assignments and transfers;
3.) all conditions precedent have been met;
4.) the mortgagor is in default; and
5.) the amount of principal and interest due.
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 9
{¶14} Id. at ¶¶ 40-45.
{¶15} Wachovia involved a foreclosure on a debt instrument, while the instant
case involves a judgment lien foreclosure. We find the above-quoted elements
inapplicable in a foreclosure action such as the instant case, which does not involve a
mortgage and a note.
{¶16} Marietta filed its certificate of judgment against the Verhovecs in
accordance with R.C. 2329.02, which provides in pertinent part:
Any judgment or decree rendered by any court of general jurisdiction,
including district courts of the United States, within this state shall be a lien
upon lands and tenements of each judgment debtor within any county of
this state from the time there is filed in the office of the clerk of the court of
common pleas of such county a certificate of such judgment, setting forth
the court in which the same was rendered, the title and number of the action,
the names of the judgment creditors and judgment debtors, the amount of
the judgment and costs, the rate of interest, if the judgment provides for
interest, and the date from which such interest accrues, the date of rendition
of the judgment, and the volume and page of the journal entry thereof.
{¶17} Pursuant to this statute, “a lien is immediately created upon the lands of the
judgment debtor when a certificate of judgment is filed with the clerk of courts.” E.g., Std.
Hardware & Supply Co. v. Bolen, 115 Ohio App.3d 579, 582, 685 N.E.2d 1264, 1266 (4th
Dist. Hocking 1996).
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 10
{¶18} R.C. 2323.07 provides for foreclosure on a judgment lien:
When a mortgage is foreclosed or a specific lien enforced, a sale of
the property, or a transfer of property pursuant to sections 323.28, 323.65
to 323.78, and 5721.19 of the Revised Code, shall be ordered by the court
having jurisdiction or the county board of revision with jurisdiction pursuant
to section 323.66 of the Revised Code.
{¶19} This Court has explained the procedure employed for foreclosure on a
judgment lien:
R.C. 2329.02 is intended to create a specific lien upon the lands and
tenements of the judgment debtor which lie within the county at the time
there is filed in the office of the clerk of the court of common pleas of such
county a certificate of judgment. The lien applies specifically to all such
property identified as belonging to the judgment debtor at the time of the
filing of the certificate and may be enforced as a specific lien pursuant to
R.C. 2323.07 by a foreclosure action.
{¶20} Sheely v. Gindlesberger, 5th Dist. Holmes No. 16CA008, 2017-Ohio-200, ¶
21.
{¶21} R.C. 2323.07 recognizes the enforcement of a specific lien, as in the instant
case, as a separate procedure from a mortgage foreclosure. The elements set forth by
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 11
this Court for a mortgage foreclosure in Wachovia Bank, supra, do not make sense in the
context of a judgment lien foreclosure, where the debtor has not defaulted on a debt
instrument. We find the trial court did not err in failing to overrule Marietta’s motion for
summary judgment for failure to establish the elements of a mortgage foreclosure.
DORMANT JUDGMENT
{¶22} The Verhovecs next argue Marietta’s judgment in the amount of $32,974.51
was dormant pursuant to R.C. 2329.07(C):
(C) If, in any county other than that in which a judgment was
rendered, the judgment has become a lien by reason of the filing, in the
office of the clerk of the court of common pleas of that county, of a certificate
of the judgment as provided in sections 2329.02 and 2329.04 of the Revised
Code, or there has been a renewal of the judgment, except as otherwise
provided under division (D) of this section, the judgment shall cease to
operate as a lien upon lands and tenements of the judgment debtor within
that county, unless one of the following occurs within five years or, if the
judgment is in favor of the state, within fifteen years:
(1) An execution on a judgment is issued.
(2) A certificate of the judgment is filed in that county.
(3) An order of garnishment is issued or is continuing, or until the last
garnishment payment is received by the clerk of courts or the final report
and answer is filed by the garnishee, whichever is later.
(4) A proceeding in aid of execution is commenced or is continuing.
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 12
{¶23} The Verhovecs argue Marietta’s motion for summary judgment should have
been denied and the entire action dismissed because Marietta took no steps to prevent
the dormancy of its judgment lien in Case No 2014 CJ 06 0607, the judgment lien against
Edward Verhovec in the amount of $32,974.51. However, the trial court found the
judgment against Edward Verhovec to be dormant:
Upon review of the Court file, the Court FINDS that there is no
indication that Plaintiff took any steps before January 28, 2021 to renew the
judgment lien filed on June 6, 2014.
The Court FINDS, therefore, that the judgment issued by the Court
of Common Pleas of Washington County against Edward Verhovec in Case
No. 11 OT 197 in the amount of $32,974.51 ceased to operate as a lien
upon the subject property on June 6, 2019.
The Court FINDS, therefore, that Plaintiff’s judgment lien on the
Second Judgment does not have priority over the liens of The Huntington
National Bank and Cambridge and MacMillan Company.
The Court FINDS, therefore, that only Plaintiff’s judgment lien on the
First Judgment has priority over the liens of The Huntington National Bank
and Cambridge and MacMillan Company.
{¶24} Judgment Entry, August 31, 2022, page 15.
{¶25} We find no error in the trial court’s judgment. The judgment against Edward
Verhovec only in the amount of $32,974.51, was not a part of the 2017 debtors’
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 13
examination, which Marietta filed only as to the $274,033.49 judgment. Because Marietta
took no action to prevent the judgment against Edward Verhovec only from going
dormant, it ceased to operate as a lien against the property as of June 6, 2019.
FAILURE TO PERFECT LIEN WITH TUSCARAWAS COUNTY RECORDER
{¶26} The Verhovecs argue the instant foreclosure action should have been
dismissed because Marietta failed to file the lien with the county recorder, as required by
R.C. 2329.02, which provides in pertinent part:
No such judgment or decree shall be a lien upon any lands, whether
or not situated within the county in which such judgment is rendered,
registered under sections 5309.02 to 5309.98, inclusive, and 5310.01 to
5310.21, inclusive, of the Revised Code, until a certificate under the hand
and official seal of the clerk of the court in which the same is entered or of
record, stating the date and purport of the judgment, giving the number of
the case, the full names of the parties, plaintiff and defendant, and the
volume and page of the journal or record in which it is entered, or a certified
copy of such judgment, stating such facts, is filed and noted in the office of
the county recorder of the county in which the land is situated, and a
memorial of the same is entered upon the register of the last certificate of
title to the land to be affected (Emphasis added).
{¶27} When quoting the statute in their brief in support of their argument, the
Verhovecs omitted the portion in italics above, which requires filing the judgment with the
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 14
county recorder only when the land is registered under sections R.C. 5309.02 to 5309.98,
and 5310.01 to 5310.21. The trial court found the parties presented no evidence to
suggest the land is registered under these sections, and therefore the Verhovecs’
argument Marietta was required to file the lien with the Tuscarawas County Recorder’s
Office was not well taken. Judgment entry, May 19, 2022, page 14. We find no error in
the trial court’s judgment.
LACHES, WAIVER
{¶28} The Verhovecs argue the trial court erred in overruling their motion for
summary judgment based on their defense of waiver and laches.
{¶29} Waiver is a voluntary relinquishment of a known right, and is generally
applicable to all personal rights and privileges, whether contractual, statutory, or
constitutional. Glidden Co. v. Lumbermens Mut. Cas. Co., 112 Ohio St.3d 470, 2006-
Ohio-6553, 861 N.E.2d 109, ¶49. We find no evidence in the record Marietta waived its
right to pursue foreclosure simply by waiting to pursue foreclosure as a remedy of last
resort when it was unable to collect the judgment by other measures.
{¶30} “The elements of laches are (1) unreasonable delay or lapse of time in
asserting a right, (2) absence of an excuse for the delay, (3) knowledge, actual or
constructive, of the injury or wrong, and (4) prejudice to the other party.” State ex rel. Polo
v. Cuyahoga Cty. Bd. of Elections, 74 Ohio St.3d 143, 145, 656 N.E.2d 1277 (1995). For
purposes of the doctrine of laches, prejudice exists when the plaintiff's delay causes the
loss of evidence helpful to the defendant's case, or when the person against whom the
claim is asserted has changed his position in reasonable reliance on the words or conduct
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 15
of the party who would enforce the claim. E.g., U.S. Bank, Natl. Assn. v. Mitchell, 2nd
Dist. Montgomery No. 27984, 2018-Ohio-4887, ¶ 20.
{¶31} The trial court found the Verhovecs presented no evidence in support of
their summary judgment motion suggesting Marietta’s delay in bringing the foreclosure
action caused the loss of evidence or caused them to change their position in reasonable
reliance on the words or conduct of Marietta. We agree. The affidavit of Dorothy
Verhovec, attached to the motion for summary judgment, averred she was the co-owner
of the property, she was 78 years old, and the property serves as the sole residence of
herself and her husband. Likewise, the affidavit of Edward Verhovec attached to the
motion stated he was 77 years old, co-owned the property with Dorothy, and the property
was the sole residence of himself and Dorothy. Nothing in the affidavits provided
evidence of prejudice by the delay in pursuing foreclosure as a remedy, as opposed to
prejudice from the foreclosure action itself. As such, we find the trial court did not err in
finding the Verhovecs failed to present evidence in support of their defense of laches.
INSUFFICIENT PROPERTY VALUE TO PAY JUDGMENT
{¶32} The Verhovecs argue because of the value of the property and the
homestead exemptions to which they are entitled under R.C. 2329.66, Marietta will
receive no proceeds from the sale, and thus foreclosure is inequitable.
{¶33} This Court has previously rejected a similar argument:
Appellants do not seem to take issue with the procedure in this
matter, but rather that the property is not of sufficient value to pay the
exemption in full.
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 16
Upon review and in light of the fact that Appellants provide no law to
support their assertion that a party obtaining a judgment under R.C. §
2329.02 cannot levy execution upon property under R.C. § 2323.07, we find
Appellants' assignment not well-taken.
{¶34} Sheely v. Gindlesberger, supra, at ¶¶ 24-25.
{¶35} The Verhovecs cite no legal authority for its proposition Marietta cannot
foreclose on the property pursuant to R.C. 2923.07 simply because they believe the value
of the property will be of insufficient value to pay Marietta. We find the trial court did not
err in failing to grant summary judgment for the Verhovecs on this basis.
{¶36} In summary, we find the trial court did not err in granting summary judgment
in favor of Marietta and denying the Verhovecs’ motion for summary judgment. The first
assignment of error is overruled.
II.
{¶37} In their second assignment of error, the Verhovecs argue the trial court
erred in finding Huntington’s mortgage should be paid from their homestead exemption.
In support of their argument, they cite two cases, a 1918 appellate case from the Third
District, and a 1910 Common Pleas Court decision. We find the cases relied upon by
Appellant do not reflect the current state of Ohio law regarding the payment of a
consensual mortgage.
{¶38} As this Court has previously recognized, the homestead exemption takes
priority over a nonconsensual lien, such as Marietta’s judgment lien in the instant case,
but does not take priority over a consensual mortgage, such as Huntington’s mortgage:
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 17
Appellant contends that he is entitled to a $5,000.00 homestead
exemption pursuant to R.C. 2329.66(A)(1)(b) as priority over appellee's
mortgage. Such section provides, in relevant part, as follows:
“Every person who is domiciled in this state may hold property
exempt from execution, garnishment, attachment, or sale to satisfy a
judgment or order, as follows:
(b) ... the person's interest, not to exceed five thousand dollars, in
one parcel or item of real or personal property that the person or a
dependent of the person uses as a residence.”
However, pursuant to R.C. 2329.661, certain claims are not
exempted by R.C. 2329.66(A)(1) from execution, garnishment, attachment
or sale. R.C. 2329.661 states in relevant part, that 2329.66(A)(1) does not:
“(1) Extend to a judgment rendered on a mortgage executed, or
security interest given on real or personal property by a debtor or to a claim
for less than four hundred dollars for manual work or labor;
(2) Impair the lien, by mortgage or otherwise, of the vendor for the
purchase money of real or personal property that the debtor or a dependent
of the debtor uses as a residence, the lien of a mechanic or other person,
under a statute of this state, for materials furnished or labor performed in
the erection of a dwelling house on real property, or a lien for the payment
of taxes due on real property;
(3) Affect or invalidate any mortgage on any real property, or any lien
created by such a mortgage.
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 18
(B) No promise, agreement, or contract shall be made or entered into
that would waive the exemption laws of this state, and every promise,
agreement, or contract insofar as it seeks to waive the exemption laws of
this state is void.”
It is clear from the plain language of R.C. 2329.661(A)(3) that the
$5,000.00 statutory homestead exemption does not affect or invalidate the
validity of appellant's mortgage. See The Metropolitan Bank of Lima, Ohio
v. Steven E. Turner, et al (April 28, 1987), Auglaize App. No. 2-85-26,
unreported and The State Savings and Loan Co. v. Sam Parker, III, et al.
(Nov. 21, 1986), Lake App. No. 11-162, unreported. Thus, appellee's
mortgage claim has priority over appellant's homestead exemption claim.
Moreover, while appellant cites numerous cases in support of his contention
that his homestead exemption under R.C. 2329.66 is not impaired by
judicial liens, such cases are not applicable since a mortgage lien is not a
judicial lien. A judicial lien, unlike a mortgage lien, is obtained involuntarily
by judgment, levy, sequestration, or other legal or equitable process or
proceeding as provided for in Bankruptcy Code Section 101. A mortgage
lien is a consensual lien. Appellee's mortgage is not a judicial lien and,
therefore, has priority over appellant's homestead exemption claim.
{¶39} Markle v. Wayne Savings & Loan Co., 5th Dist. Ashland No. 98-COA-
01274, 1999 WL 547443, *3.
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 19
{¶40} The trial court’s finding Marietta’s lien has priority over Huntington’s
mortgage has not been assigned as error on appeal. Pursuant to Ohio law, Huntington’s
and Cambridge’s mortgage liens have priority over the Verhovecs’ homestead exemption,
but Marietta’s judgment lien does not have priority over the Verhovecs’ homestead
exemption. Marietta’s judgment lien takes priority over Huntington’s and Cambridge’s
mortgage liens and the claims of the Verhovecs only to the extent the proceeds of the
sale exceed the homestead exemption. Because Marietta’s judgment has priority over
Huntington’s mortgage and Cambridge’s mortgage, Marietta is entitled to the first
proceeds of sale after satisfaction of the costs, taxes, and the payment of the homestead
exemption from the set-aside. However, Huntington’s and Cambridge’s mortgage liens
are consensual, and therefore have priority over the Verhovecs’ claim to the homestead
exemption set-aside. We find the trial court did not err in ordering the homestead
exemption to be set aside before the payment of Marietta’s judgment over which the
homestead exemption has priority, but then using the set-aside to pay the Huntington and
Cambridge mortgage liens before any potential payment to the Verhovecs from the set-
aside.
{¶41} The second assignment of error is overruled.
{¶42} We next turn to the assignments of error raised by Cambridge on appeal.
I.
{¶43} In its first assignment of error, Cambridge argues the trial court erred in
failing to recognize its mortgage in the order directing the payment of the proceeds of the
foreclosure sale.
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 20
{¶44} In the judgment of foreclosure, the trial court made the following finding as
to Cambridge’s mortgage:
Defendants, Cambridge and McMillan Company asserted interests
in said premises, as set forth in its answer herein. The Court makes no
finding as to the right, title, interest, claim or lien of said Defendant as set
forth in their answer except that such right, title, interest claim or lien of said
Defendant is hereby ordered transferred to the proceeds of the sale of said
premises after the payment of the costs of this action, real estate taxes due
and payable, and the amount due to the Plaintiff on its first lien and the
amount due to the Defendant, The Huntington National Bank on its
mortgage.
{¶45} However, in the order directing the payment of the proceeds, Cambridge
was not included. We find the record established Cambridge possessed a mortgage over
the property, although the exact amount currently due on said mortgage was not
established. Marietta’s complaint in the instant case alleged Cambridge may have an
interest in the property due to a recorded mortgage in the amount of $150,000. In its
answer, Cambridge admitted this allegation. The amended preliminary judicial report,
filed January 13, 2022, noted a mortgage from the Verhovecs to Cambridge in the amount
of $150,000, recorded May 29, 2015. Because the record affirmatively establishes the
existence of a mortgage from the Verhovecs to Cambridge, albeit not the exact amount
due on said mortgage, we find the trial court erred in not including the Cambridge
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 21
mortgage in its order directing payment of the proceeds of the foreclosure sale. We find
the mortgage held by Cambridge should be paid as a consensual mortgage from the
homestead exemption, second in priority to Huntington.
{¶46} The first assignment of error is sustained.
II.
{¶47} In its second assignment of error, Cambridge argues the trial court erred in
not mentioning the right of Cambridge to the rental income in the listed items in the last
pages of the foreclosure decree.
{¶48} In the foreclosure decree, the trial court stated:
Any purchaser at a judicial sale in this matter will take title to the
property in this matter subject to an assignment of rents in favor of
Cambridge and MacMillan, referred to in Tuscarawas County Common
Pleas Court case no. 2019 CV 09 0608.
{¶49} In the “order” section of the judgment entry, just prior to the listing of the
order in which the proceeds were to be paid, the trial court stated:
The Plaintiff may file a praecipe, at which time the Clerk of Courts
shall issue an Order of Sale to the Sheriff of this County ordering the Sheriff
to sell the same at public sale, as upon execution and according to law, free
and clear of all interests of all parties to this action, except subject to an
assignment of rents in favor of Cambridge and MacMillan, referred to in
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 22
Tuscarawas County Common Pleas Court case no. 2019 CV 09 0608, after
having the same properly appraised and advertised according to law.
{¶50} The listed items, in which Cambridge argues its rent assignment should
have been referenced a third time, follow the directive, “The Sheriff, upon confirmation of
sale, pay from the proceeds the following [.]” The rent assignment is not a part of the
proceeds of the sale. We find the trial court’s reference of the rent assignment twice in
its judgment entry sufficient to protect Cambridge’s interest and put any purchaser on
notice of the rent assignment.
{¶51} The second assignment of error is overruled.
III.
{¶52} In its third assignment of error, Cambridge argues the trial court erred in
denying its motion for summary judgment based on judicial estoppel. Cambridge argues
by filing the foreclosure action, Marietta took a position inconsistent with the position it
asserted in a creditor’s bill action in Washington County. Cambridge argues in the
creditor’s bill action, Marietta asserted the Verhovecs had no assets to satisfy the
judgment, and therefore cannot now argue the Verhovecs have real property subject to
foreclosure available to satisfy the judgment.
{¶53} In order to apply the doctrine of judicial estoppel, the proponent must show
his opponent “(1) took a contrary position; (2) under oath in a prior proceeding; and (3)
the prior position was accepted by the court.” Chrysler Group, L.L.C. v. Dixon, 8th Dist.
Cuyahoga No. 104628, 2017-Ohio-1161, ¶ 16.
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 23
{¶54} The position taken by Marietta in the creditor’s bill action, as required by
R.C. 2333.01, was the judgment debtor does not have sufficient personal or real property
to satisfy the judgment. We find the position taken by Marietta in the creditor’s bill action
related to the sufficiency of the Verhovecs’ assets to satisfy the judgments against them
to be different than its position in the instant case, which is the Verhovecs possessed real
property subject to foreclosure to be paid toward satisfaction of the judgment.
{¶55} In addition, there was no final judgment in the creditor’s bill action, and
therefore Cambridge has not established the prior position of Marietta was accepted by
the court.
{¶56} We find the trial court did not err in overruling Cambridge’s motion for
summary judgment.
{¶57} The third assignment of error is overruled.
IV.
{¶58} In its fourth assignment of error, Cambridge argues the trial court erred in
granting Marietta’s motion for summary judgment because Marietta failed to record the
judgment lien with the county recorder as required by R.C. 2329.02. For the reasons
stated earlier in this Opinion in our discussion of the Verhovecs’ first assignment of error,
Marietta was not required to record its lien with the county recorder.
Tuscarawas County, Case Nos. 2023 AP 07 0043 & 2023 AP 07 0044 24
{¶59} The fourth assignment of error is overruled.
By: Hoffman, J.
Delaney, P.J. and
Wise, J. concur