Countrywide Home Loans Servicing, L.P. v. Nichpor , 136 Ohio St. 3d 55 ( 2013 )

[Cite as Countrywide Home Loans Servicing v. Nichpor, 136 Ohio St. 3d 55, 2013-Ohio-2083.]
COUNTRYWIDE HOME LOANS SERVICING, L.P., APPELLEE, v. NICHPOR ET AL.,
APPELLANTS.
[Cite as Countrywide Home Loans Servicing v. Nichpor, 136 Ohio St. 3d 55,
2013-Ohio-2083.]
Voluntary dismissals—Foreclosure—After a judgment entry grants a decree of
foreclosure and order of sale, the foreclosure action cannot be dismissed
pursuant to Civ.R. 41(A)(1)(a), because that rule pertains only to the
voluntary dismissal of a pending case.
(No. 2012-0578—Submitted February 26, 2013—Decided May 28, 2013.)
CERTIFIED by the Court of Appeals for Wood County,
No. WD-11-047, 2012-Ohio-1101.
____________________
SYLLABUS OF THE COURT
After a judgment entry grants a decree of foreclosure and order of sale, the
foreclosure action cannot be dismissed pursuant to Civ.R. 41(A)(1)(a),
because that rule pertains only to the voluntary dismissal of a pending
case.
____________________
O’NEILL, J.
{¶ 1} In a foreclosure action, the mortgage company filed a notice of
voluntary dismissal pursuant to Civ.R. 41(A)(1)(a), after a default judgment had
been entered in favor of the mortgage company and the property was sold at a
sheriff’s sale. The mortgage company then refiled its complaint in foreclosure.
The trial court rejected the borrowers’ claim that the action was precluded by res
judicata and again granted an order of foreclosure. The appellate court affirmed,
concluding that a foreclosure action is a two-part process consisting of an order of
SUPREME COURT OF OHIO
foreclosure and an order confirming the sheriff’s sale, and that until the order
confirming the sheriff’s sale is entered, the plaintiff may terminate the case
without prejudice by filing a Civ.R. 41(A)(1)(a) notice of voluntary dismissal. For
the reasons that follow, we disagree and reverse the decision of the court of
appeals. The outcome reached by the Sixth District Court of Appeals is in
contravention of Civ.R. 41(A)(1)(a). We hold that a judgment of foreclosure
cannot be dissolved by the filing of a notice of voluntary dismissal pursuant to
Civ.R. 41(A)(1)(a) after a trial court has entered judgment on the underlying note.
Facts and Procedural History
{¶ 2} On February 27, 2009, appellee, Countrywide Home Loans
Servicing, L.P., filed a complaint in foreclosure in the Wood County Court of
Common Pleas against appellants, Michael P. and Joanne M. Nichpor. The trial
court granted judgment on the mortgage note in favor of Countrywide on May 18,
2009. That judgment included Civ.R. 54(B) language that “[t]here is no just
reason for delay.” Subsequently, a writ was issued for an order of sale. The
sheriff’s sale was conducted on July 1, 2010, and the property was purchased by a
third party, Jennifer Reichert. On July 12, appellee filed a notice of voluntary
dismissal pursuant to Civ.R. 41(A). On August 3, the trial court declared the
matter dismissed because of the voluntary dismissal filed by appellee and
declared all pending motions moot.
{¶ 3} Appellee refiled the complaint on July 16, 2010. The trial court
granted summary judgment in favor of appellee on August 5, 2011. Appellants
filed a timely appeal to the Sixth District Court of Appeals. On March 16, 2012,
the appellate court affirmed the trial court’s decision. Countrywide Home Loans
Servicing, L.P. v. Nichpor, 6th Dist. No. WD-11-047, 2012-Ohio-1101. The
appellate court then certified that its decision was in direct conflict with a well-
reasoned decision by the Second District Court of Appeals, Coates v. Navarro, 2d
Dist. Nos. 86-CA-11 and 86-CA-18, 1987 WL 8490 (Mar. 27, 1987), on the
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following issue: “Whether a foreclosure action, in which judgment of foreclosure
has, in fact, been issued, can be dissolved in its entirety prior to confirmation of
sale, with the filing of a voluntary dismissal, filed by a party in accordance with
Civ.R. 41(A).” 2012-Ohio-1101, at ¶ 15-16. This court accepted the case for
review on June 20, 2012, and ordered the parties to brief the certified issue. 132
Ohio St. 3d 1421, 2012-Ohio-2729, 969 N.E.2d 269.
Analysis
{¶ 4} The starting point in our analysis is Civ.R. 41(A)(1)(a). It provides
that “a plaintiff, without order of court, may dismiss all claims asserted by that
plaintiff against a defendant by doing either of the following: filing a notice of
dismissal at any time before the commencement of trial * * *.”
{¶ 5} The key to our analysis is how to apply this rule when a trial is not
held. Default judgment is the functional equivalent of a judgment following a
trial. Civ.R. 55(B). A trial is defined as “a judicial examination of the issues,
whether of law or of fact, in an action or proceeding.” R.C. 2311.01. In order to
enter a default judgment, a court must determine that no issues of law or fact exist
and that the plaintiff is entitled to judgment. Ohio courts have previously held
that an order of default judgment means that a trial has commenced for purposes
of Civ.R. 41(A) and the matter has proceeded to verdict and final judgment. See
Kahler v. Capehart, 3d Dist. No. 13-03-55, 2004-Ohio-2224, ¶ 8. Additionally,
in GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St. 2d 146, 149-150,
351 N.E.2d 113 (1976), this court stated, “Regardless of whatever else may be
said of a default judgment, it is a judgment. It is as good as any other judgment.
It is a final determination of the rights of the parties.” (Emphasis added.)
{¶ 6} That this default judgment occurred within a foreclosure
proceeding does not make the judgment any less final. All that remained in this
case were administrative matters finalizing the result of the sheriff’s sale and
giving the mortgagors the opportunity to exercise their equitable right of
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redemption. These actions can be classified as proceedings to aid in execution of
the judgment. In Triple F Invests. v. Pacific Fin. Serv., Inc., 11th Dist. No. 2000-
P-0090, 2001 WL 589343, *3 (June 2, 2001), the Eleventh District stated:
This court has held that a debtor may immediately appeal
an order of sale and decree of foreclosure because such are final
and appealable orders. Ohio Dept. of Taxation v. Plickert (1998),
128 Ohio App. 3d 445, 446 [715 N.E.2d 239] (citing Third Natl.
Bank of Circleville v. Speakman [1985], 18 Ohio St. 3d 119 [480
N.E.2d 411]). Once an order of sale and decree of foreclosure is
filed, a creditor may file a praecipe for an order directing the
sheriff to sell the property. This second phase of the proceedings
is viewed as a separate and distinct action seeking enforcement of
an order of sale and decree of foreclosure. Ohio Dept. of Taxation
at 447. The appraisal of the foreclosed property, the sheriff’s sale,
and the confirmation of that sale have been described as special
proceedings to enforce an order of sale and decree of foreclosure.
Citizens Loan & Savings Co. v. Stone (1965), 1 Ohio App. 2d 551,
552 [206 N.E.2d 17]; Shumay v. Lake Chateau, Inc. (Apr. 22,
1981), Medina App. Nos. 1013 and 1034 [1981 WL 3947],
unreported, at 6.
{¶ 7} To reach the conclusion that the Sixth District Court of Appeals
did and to grant a lender the right to dismiss an action after a trial court has issued
what it has indicated was a final judgment would lead to the untenable result that
an unhappy lender could simply wait until after the sheriff’s sale has occurred,
decide that the sale price was too low, and then dismiss the case in order to get a
second bite at the apple. This flies in the face of the general policy that judicial
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sales have a certain degree of finality. Ohio Sav. Bank v. Ambrose, 56 Ohio St. 3d
53, 55, 563 N.E.2d 1388 (1990).
Conclusion
{¶ 8} Based upon the foregoing analysis, we answer the certified-conflict
question in the negative, and we hold that after a judgment entry grants a decree
of foreclosure and order of sale, the foreclosure action cannot be dismissed
pursuant to Civ.R. 41(A)(1)(a), because that rule pertains only to the voluntary
dismissal of a pending case. The judgment is reversed, and the matter is
remanded for further proceedings consistent with this opinion.
Judgment reversed
and cause remanded.
O’CONNOR, C.J., and PFEIFER, O’DONNELL, LANZINGER, KENNEDY, and
FRENCH, JJ., concur.
____________________
Manley, Deas & Kochalski, L.L.C., Matthew J. Richardson, Andrew C.
Clark, and Benjamin Ogg, for appellee.
Heban, Sommer & Murphree, L.L.C., Kevin A. Heban, Gary O. Sommer,
R. Kent Murphree, and John P. Lewandowski, for appellants.
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