FIG as Custodian for FIG OH18, L.L.C. v. Jones , 2024 Ohio 5116 ( 2024 )

[Cite as FIG as Custodian for FIG OH18, L.L.C. v. Jones, 2024-Ohio-5116.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
MONTGOMERY COUNTY
FIG AS CUSTODIAN FOR FIG OH18 :
LLC AND SECURED PART :
: C.A. No. 30104
Appellant :
: Trial Court Case No. 2021 CV 01168
v. :
: (Civil Appeal from Common Pleas
DORIAN JONES, ET AL. : Court)
:
Appellees :
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OPINION
Rendered on October 25, 2024
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DAVID T. BRADY, Attorney for Appellant
ANASTASIA TIPLER, Attorney for Appellee
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EPLEY, P.J.
{¶ 1} FIG, as custodian for FIG OH18 and Secured Party, appeals from the trial
court’s dismissal with prejudice of its foreclosure action pursuant to Civ.R. 12(B)(6). For
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the following reasons, the trial court’s judgment will be affirmed.
I. Facts and Procedural History
{¶ 2} Since April 2016, Dorian Jones (aka Dorian Jones-Person) has owned the
property located at 817 Conners Street in Dayton. On November 19, 2019, FIG
purchased a tax certificate (Tax Certificate No. 2019-0000000816) concerning the
Conners Street property from the Montgomery County Treasurer, pursuant to R.C.
5721.33. The certificate reflected delinquent taxes of $4,439.16, a certificate purchase
price of $4,839.16, and a negotiated interest rate of 18 percent. FIG purchased a second
tax certificate (Tax Certificate No. 2020-0000000156) concerning the same property on
November 23, 2020. Both certificates entitled FIG to seek foreclosure within three years
of the date of purchase.
{¶ 3} On March 22, 2021, FIG filed a notice of intent to foreclose on the 2019 tax
certificate with the Montgomery County Treasurer. The treasurer promptly certified that
the property had not been redeemed.
{¶ 4} On March 24, 2021, two days after filing its notice of intent, FIG filed a
foreclosure action against Jones and others. It sought to foreclose on the 2019 tax
certificate, have both certificates declared valid first liens, and have the property sold.
FIG attached copies of the tax certificates, the quit claim deed conveying the property to
Jones, its notice of intent to foreclose, and a preliminary judicial report, which showed
that $430.68 in taxes were owing as of the first half of tax year 2020.
{¶ 5} FIG attempted to serve Jones by certified mail, FedEx, and personal service.
Service by certified mail and FedEx were unsuccessful. The docket shows that personal
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service was completed on June 11, 2021, when a woman signed for the complaint and
summons at an address on Crestmore Avenue. When Jones did not file an answer, the
trial court instructed FIG to file a motion for default judgment, which it did. On July 23,
2021, the trial court entered a judgment and decree of foreclosure.
{¶ 6} Nearly two years later, FIG filed a praecipe for an order of sale, and a sheriff’s
sale was scheduled for October 6, 2023. However, on September 27, Jones moved for
relief from the foreclosure judgment, pursuant to Civ.R. 60(B) and the court’s inherent
power, and to vacate the sheriff’s sale. He indicated that he had not been served with
the complaint and summons, that he did not know the woman who signed for the
documents, and that he had learned that a different person named Dorian Jones resided
at the Crestmore residence. Jones stated that he had been unaware of the foreclosure
action until September 8, 2023, when his cousin notified him that his home was listed for
a sheriff’s sale. In response, FIG moved to withdraw the sheriff’s sale “as service was
not perfected on the correct defendant.” The trial court canceled the sale.
{¶ 7} Again acknowledging that service had been made on the incorrect individual,
FIG also filed a motion to vacate the judgment and decree of foreclosure and to strike the
June 2021 service on the wrong Dorian Jones. Two days later, on October 14, 2023,
the trial court granted FIG’s motion. Within days, FIG sought to have Jones served by
certified mail. Jones was successfully served on October 23, 2023.
{¶ 8} After receiving an extension to answer or otherwise respond to the complaint,
Jones filed a Civ.R. 12(B)(6) motion to dismiss “for failing to comply with the governing
statute of limitations related to tax liens and any foreclosure action related thereto.” He
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argued that he had not been served within one year of the filing of the complaint, as
required by Civ.R. 3(A), and therefore the foreclosure action had not commenced on
March 24, 2021. Consequently, he argued, FIG did not comply with the statutory
requirement to commence a foreclosure proceeding within 120 days of filing the notice of
intent to foreclose, and the tax certificates expired. Jones asserted that the
circumstances were analogous to Moore v. Mt. Carmel Health Sys., 2020-Ohio-4113.
{¶ 9} FIG opposed the motion, arguing that dismissal under Civ.R. 12(B)(6) was
inappropriate, as its complaint adequately stated a claim and evidence was required to
establish Jones’s defense. FIG argued, alternatively, that its case had “not been pending
for more than one year when taking into account the effect of any tolling of service while
the case sat at judgment.” It noted that it had received a judgment within four months of
filing its action and asserted that it should not be penalized for the time it waited, in good
faith, to execute upon the judgment. Finally, it argued that dismissal would not benefit
either party: it would immediately refile the action, which would only add fees and costs.
{¶ 10} The trial court granted the motion and dismissed the action with prejudice.
It concluded that FIG’s claims were time-barred, because it had failed to serve Jones
within one year, as required by Civ.R. 3(A), and had not commenced its foreclosure action
within 120 days of its notice of intent to foreclose, as required by R.C. 5721.37(C)(2).
The court rejected FIG’s contention that the one-year period to serve Jones was tolled by
the judgment and decree of foreclosure. The court further found that both tax certificates
had been cancelled because more than three years had elapsed since their purchase.
{¶ 11} FIG appeals from the trial court’s judgment. In its sole assignment of error,
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FIG claims that the trial court erred in dismissing its case with prejudice as the Ohio
savings statute permitted it to refile its action within one year of dismissal.
II. Standard of Review
{¶ 12} “A motion to dismiss a complaint for failure to state a claim upon which relief
can be granted, pursuant to Civ.R. 12(B)(6), tests the sufficiency of a complaint. In order
to prevail, such a complaint must demonstrate that the plaintiff can prove no set of facts
entitling him to relief.” Grover v. Bartsch, 2006-Ohio-6115, ¶ 16 (2d Dist.). A reviewing
court must construe the complaint in the light most favorable to the plaintiff, presume the
factual allegations in the complaint to be true, and make all reasonable inferences in favor
of the plaintiff. Id.{¶ 13} “A complaint may be dismissed under Civ.R. 12(B)(6) for failing to comply
with the applicable statute of limitations when the complaint on its face conclusively
indicates that the action is time-barred.” Ohio Bur. of Workers’ Comp. v. McKinley, 2011-
Ohio-4432, ¶ 13.
{¶ 14} Generally, if a movant submits and relies on evidence outside the face of
the pleadings to support the Civ.R. 12(B)(6) motion and the trial court does not exclude
that evidence, the motion should be treated as a motion for summary judgment pursuant
to Civ.R. 56. Civ.R. 12(B); Timberlake Apts. LLC v. Underwriters at Lloyds London,
2022-Ohio-29, ¶ 17 (2d Dist.). However, the Ohio Supreme Court has permitted trial
courts to take judicial notice of “appropriate matters” in considering a Civ.R. 12(B)(6)
motion without having to convert it to a motion for summary judgment. State ex rel. Neff
v. Corrigan, 75 Ohio St.3d 12, 16 (1996); State ex rel. Scott v. Cleveland, 2006-Ohio-
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6573, ¶ 26. Under this narrow exception, a trial court could take judicial notice of the
circumstances surrounding service of the complaint and summons when resolving
Jones’s Civ.R. 12(B)(6) motion. Pearson v. Columbus, 2014-Ohio-5563 (10th Dist.); see
also Fisher v. Smith & Lehrer Co., L.P.A., 2024-Ohio-1177, ¶ 14 (6th Dist.) (trial court
could take judicial notice of proceedings in immediate case before it when resolving Civ.R.
12(B)(6) motion); Am. Tax Funding L.L.C. v. Miamisburg, 2011-Ohio-4161, ¶ 26 (2d Dist.)
(whether the trial court’s own records were “appropriate” for deciding a Civ.R. 12(B)(6)
motion depended on the purpose for which they were considered).
{¶ 15} “An order granting a Civ.R. 12(B)(6) motion to dismiss is subject to de novo
review.” Duer v. Henderson, 2009-Ohio-6815, ¶ 68 (2d Dist.). That means the
appellate court independently examines the complaint to determine whether the dismissal
was appropriate. Boyd v. Archdiocese of Cincinnati, 2015-Ohio-1394, ¶ 13 (2d Dist.).
II. Review of the Trial Court’s Dismissal with Prejudice
{¶ 16} The record provides the following relevant timeline.
DATE EVENT
Nov. 19, 2019 First tax certificate purchased
Nov. 23, 2020 Second tax certificate purchased
Mar. 22, 2021 Notice of intent to foreclose on 2019 tax certificate
Mar. 24, 2021 Complaint for foreclosure filed
July 20, 2021 Deadline to file foreclosure action based on notice of intent
July 23, 2021 Judgment and decree of foreclosure entered
Mar. 23, 2022 Commencement deadline under Civ.R. 3(A)
Nov. 19, 2022 2019 tax certificate expired
Sept. 27, 2023 Jones’s motion for relief from judgment and to vacate sale
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Oct. 12, 2023 FIG’s motion to vacate foreclosure judgment
Oct. 14, 2023 Foreclosure judgment vacated
Oct. 23, 2023 Service perfected on Jones
Nov. 23, 2023 2020 tax certificate expired
Dec. 1, 2023 Jones files Civ.R. 12(B)(6) motion
Mar. 15, 2024 Court grants dismissal with prejudice
{¶ 17} As the purchaser of tax certificates, FIG had two deadlines for filing a
foreclosure action related to the Conners Street property. First, FIG was required to seek
foreclosure within the three-year certificate period. See R.C. 5721.37(A)(1). Second,
after the Montgomery County Treasurer certified that the parcel had not been redeemed,
FIG was required to commence its foreclosure action within 120 days of the filing of its
notice of intent to foreclose. See R.C. 5721.37(C)(2).
{¶ 18} On March 22, 2021, FIG submitted its notice of intent to foreclose on the
2019 tax certificate, and the same day, the Treasurer certified that the property had not
been redeemed. FIG thus had until July 20, 2021 to file its foreclosure action. Based
on the dates the two tax certificates were sold, the certificates expired on November 19,
2022, and November 23, 2023, respectively.
{¶ 19} Under Civ.R. 3(A), “[a] civil action is commenced by filing a complaint with
the court, if service is obtained within one year from such filing upon a named
defendant[.]” The serving party or that party’s attorney is responsible for determining if
service has been made. Civ.R. 4.6(E).
{¶ 20} FIG filed its foreclosure complaint on March 24, 2021. Although it believed
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that it had obtained service upon Jones within a year, the parties appear to agree that
Jones was not properly served until October 23, 2023. Accordingly, FIG’s foreclosure
action was not commenced against Jones on March 24, 2021.
{¶ 21} FIG asserts that the time for service was tolled during the period when it
had a judgment and decree of foreclosure. Indeed, the foundation of FIG’s argument
appears to be that it mistakenly believed that it had commenced the case and that it
should not be penalized for that mistake. However, FIG has not cited any authority
indicating that the time for service is tolled under the circumstances before us, and we
have found none. Ohio’s Rules of Civil Procedure do not provide for tolling when service
is mistakenly made upon the wrong person. To the contrary, it was FIG’s responsibility
to ensure that proper service had been made. See Civ.R. 4.6(E); Kowalski v. Pong,
2017-Ohio-9310, ¶ 15 (2d Dist.). The fact that FIG’s mistake did not come to light until
after it had received a judgment did not justify tolling the one-year commencement period
in Civ.R. 3(A). Accord Kowalski.
{¶ 22} FIG further argues that the action should have been dismissed without
prejudice, because it was entitled to refile its action within one year of the foreclosure
judgment’s reversal, as provided by Ohio’s savings statute. Ohio’s saving statute reads:
In any action that is commenced or attempted to be commenced, if in due
time a judgment for the plaintiff is reversed or if the plaintiff fails otherwise
than upon the merits, the plaintiff . . . may commence a new action within
one year after the date of the reversal of the judgment or the plaintiff’s failure
otherwise than upon the merits or within the period of the original applicable
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statute of limitations, whichever occurs later. This division applies to any
claim asserted in any pleading by a defendant.
R.C. 2305.19(A).
{¶ 23} The savings statute “acts as an exception to the general bar of the statute
of limitations” and is “intended to provide a litigant an adjudication on the merits.” Wilson
v. Durrani, 2020-Ohio-6827, ¶ 11. It “allows plaintiffs to refile lawsuits in certain
situations after the applicable statute of limitations expires.” McCullough v. Bennett,
2024-Ohio-2783, ¶ 11.
{¶ 24} In Moore, the Ohio Supreme Court addressed whether the plaintiff could
rely on the savings statute when the complaint (a medical malpractice case) was filed
within the one-year statute of limitations, but the plaintiff neither obtained service on the
defendant-doctor within Civ.R. 3(A)’s one-year commencement period nor dismissed the
action during that time. In that case, the doctor had sought summary judgment, arguing
that the claim against him was time-barred because Moore failed to serve him within
Civ.R. 3(A)’s one-year period; service was then perfected on the doctor. The Court held
that, because Moore had not served the doctor during the one-year commencement
period, the action against the doctor had not been commenced within the statute of
limitations, the action failed, and the savings statute could not be used to revive it.
Moore, 2020-Ohio-4113, ¶ 2. The Court explained:
In order for the [savings] statute to apply, the claim must have failed
“otherwise than upon the merits” and then Moore must have filed a new
claim within one year thereafter. Here, when Moore issued instructions to
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the clerk to serve the complaint in March 2017 [20 months after the
complaint was filed], Moore’s claim hadn’t failed other than on the merits.
The case remained on the court’s docket – it was subject to dismissal, to be
sure, both because Moore had failed to accomplish service and because
the statute of limitations had run. But no such dismissal had been entered,
and if such dismissal had been entered, the expiration of the statute of
limitations would have made the failure on the merits. See LaBarbera v.
Batsch, 10 Ohio St.2d 106, 114-115, 227 N.E.2d 55 (1967) (“a judgment
based upon the statute of limitations is generally regarded as on the merits
and bars another action for the same cause”). Further, Moore did not file
a “new action.” The only thing he did was ask the clerk to serve the original
complaint that remained on the court’s docket. Thus, if the savings statute
means what it says, it does not apply.
Id. at ¶ 19.
{¶ 25} The supreme court further clarified that a new instruction to the clerk to
serve a complaint that is made after Civ.R. 3(A)’s commencement period has expired
may be treated as a dismissal and refiling for purposes of the savings statute only when
the statute of limitations has not yet expired. Id. at ¶ 26, limiting Goolsby v. Anderson
Concrete Corp., 61 Ohio St.3d 549 (1991).
{¶ 26} Finally, the Moore Court rejected the argument that the “attempt to
commence” language saved Moore’s action. The Court recognized that the savings
statute applied when both (1) the complaint was filed and service was requested within
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the limitations period and (2) the complaint was dismissed after the limitations period had
run but within Civ.R. 3(A)’s commencement period. Id. at ¶ 28, citing Thomas v.
Freeman, 79 Ohio St.3d 221 (1997). The Court distinguished Thomas, noting that, in
Moore’s case, there was no failure other than on the merits and no new action had been
filed. Id. at ¶ 29.
{¶ 27} FIG claims that Moore is distinguishable and that Thomas establishes that
the dismissal of the foreclosure judgment for lack of service should have been without
prejudice. FIG asserts that the savings statute would apply to a refiled action because
(1) it attempted to commence the action, (2) it obtained a judgment that was reversed,
and (3) the trial court dismissed the action for a reason “otherwise than on the merits.”
We disagree with FIG’s arguments.
{¶ 28} Our analysis is guided by Moore. Similar to that case, FIG timely filed its
complaint but failed to either serve Jones, the named defendant, within the one-year
commencement period in Civ.R. 3(A) or dismiss its action within that one-year period.
Because FIG did not perfect service within one year, its action was not commenced on
March 24, 2021. As in Moore, when FIG sought to have Jones served in October 2023,
the case remained on the trial court’s docket, and no new action had been filed. When
the trial court ultimately granted Jones’s Civ.R. 12(B)(6) motion to dismiss, it did so on
the ground that FIG’s action was time-barred, a failure on the merits. Like Moore, the
savings statute cannot save FIG’s claim against Jones under these circumstances.
{¶ 29} The fact that FIG had been granted a judgment in its favor that was later
vacated does not change our conclusion. Initially, we question whether the vacation of
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a judgment on the plaintiff’s own motion constitutes a “reversal” under the savings statute.
Indeed, the use of the term “reversed” suggests a reversal from an appellate court. See
Ohio Const., Art. IV, Section 3(B)(2) (generally granting appellate courts jurisdiction “to
review and affirm, modify, or reverse judgments or final orders” of inferior courts).
{¶ 30} Moreover, FIG has not referred us to any cases demonstrating the
application of the savings statute after a judgment has been vacated by the trial court due
to lack of service on the defendant. Contrary to FIG’s assertion, we have found cases
that have upheld dismissals on statute of limitations grounds where the plaintiff obtained
a default judgment, the judgment was vacated for lack of service after the running of the
statute of limitations, and service was then perfected. See Simindinger v. Meeker, 2021-
Ohio-3274 (3d Dist.); Khatib v. Peters, 2017-Ohio-95 (8th Dist.).
{¶ 31} Here, FIG obtained a default foreclosure judgment, but the judgment was
vacated on both parties’ motions due to the failure to serve Jones. After vacating the
default judgment, the trial court was left with an action that had not yet been commenced,
and the one-year period for doing so under Civ.R. 3(A) had long since past. FIG served
Jones with the complaint on October 23, 2023, two and a half years after it filed its
complaint. When Jones subsequently moved to dismiss the action, his argument was
not based on lack of service, as FIG contends; at that point, he had been successfully
served. Rather, Jones argued that FIG’s claims were now time-barred, an argument
addressing the merits of FIG’s action.
{¶ 32} Any future action filed by FIG based on the 2019 tax certificate would have
been brought well beyond the 120-day deadline based on its March 22, 2021 notice of
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intent to foreclose and after the 2019 tax certificate had expired. FIG could neither
submit a new notice of intent to foreclose to the Montgomery County Treasurer nor file a
foreclosure action within the three-year certificate terms as the tax certificates had
expired. The trial court appropriately dismissed FIG’s action with prejudice.
{¶ 33} FIG’s assignment of error is overruled.
III. Conclusion
{¶ 34} The trial court’s judgment will be affirmed.
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WELBAUM, J. and TUCKER, J., concur.