JP Morgan Grantor Trustee v. Sponseller , 2014 Ohio 5533 ( 2014 )

[Cite as JP Morgan Grantor Trustee v. Sponseller, 2014-Ohio-5533.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
JP MORGAN GRANTOR TRUSTEE C.A. No. 27244
Appellee
v. APPEAL FROM JUDGMENT
ENTERED IN THE
TIMOTHY J. SPONSELLER, et al. COURT OF COMMON PLEAS
COUNTY OF SUMMIT, OHIO
Appellants CASE No. CV-2006-04-2397
DECISION AND JOURNAL ENTRY
Dated: December 17, 2014
BELFANCE, Presiding Judge.
{¶1} Defendants-Appellants Timothy J. Sponseller and Paulexania Sponseller
(collectively “the Sponsellers”) appeal from the denial of their motion to set aside summary
judgment and order of sale pursuant to Civ.R. 60(B). For the reasons set forth below, we affirm.
I.
{¶2} In April 2006, Plaintiff-Appellee JP Morgan Grantor Trustee (“JP Morgan”) filed
a complaint in foreclosure against the Sponsellers, Ravenna Branch, and Joseph Lee Wayne.
The Sponsellers answered the complaint, generally denying that JP Morgan was the holder of the
note and mortgage but did not specifically assert that JP Morgan lacked standing. First Place
Bank responded as the successor of Ravenna Branch and disclaimed any interest in the real
property at issue. In June 2006, JP Morgan filed a motion for summary judgment and attached
an affidavit asserting that JP Morgan was the holder of the note and mortgage, that there had
been a default under the terms of the note and mortgage, that JP Morgan was accelerating the
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loan, and that $130,500.00 was due along with interest. Attached to the affidavit was a copy of
the note endorsed in blank and a copy of the mortgage issued to New Century Mortgage. As Mr.
Wayne failed to respond to the complaint, JP Morgan sought a default judgment against him.
The Sponsellers did not respond to the motion for summary judgment. The trial court awarded
summary judgment to JP Morgan on July 19, 2006. The Sponsellers did not appeal.
{¶3} On January 31, 2007, the Sponsellers filed a Chapter 13 petition for bankruptcy
which was dismissed by the bankruptcy court March 15, 2007. The sheriff sale that had been
scheduled during that timeframe was cancelled due to the automatic stay. The stay was lifted
March 30, 2007, and the case was reactivated. The property was reappraised, and another sale
scheduled. However, the Sponsellers filed another Chapter 13 petition on November 14, 2007,
which was dismissed on December 14, 2007. The foreclosure case was then reactivated January
2, 2008, and the property was again reappraised and scheduled for sale. On August 20, 2008, the
Sponsellers filed a Chapter 7 petition which was dismissed October 1, 2008. The trial court
reactivated the case October 23, 2008. Three times during 2010, the property was set for sheriff
sale, and the sale was later withdrawn by JP Morgan, twice because JP Morgan was examining a
possible loan modification and once because it did not want to proceed with execution of the
judgment at that time.
{¶4} Ultimately, the property was set for sale on December 13, 2013. The Sponsellers
filed a motion to stay execution of the judgment and the sheriff sale, which was granted.
Additionally, on November 25, 2013, the Sponsellers filed a motion to set aside summary
judgment and the order of sale pursuant to Civ.R. 60(B). The Sponsellers asserted that JP
Morgan lacked standing to file the foreclosure action and, thus, the judgment against them
should be vacated and/or should be declared void. They sought relief via Civ.R. 60(B)(4) and
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(5). JP Morgan filed a motion in opposition. On January 15, 2014, the trial court overruled the
Sponsellers’ motion, concluding that the motion was not filed within a reasonable time. The
Sponsellers have appealed, raising a single assignment of error for our review.
II.
ASSIGNMENT OF ERROR
REVIEWING THE TRIAL COURT’S DENIAL OF THE APPELLANTS’
MOTION TO SET ASIDE THE SUMMARY JUDGMENT DE NOVO, THE
RECORD IS CLEAR AND CONVINCING THAT THE TRIAL COURT
ERRED TO THE PREJUDICE OF APPELLANT[S] BY DENYING
APPELLANT[S’] MOTION AND GRANTING APPELLEE’S MOTION FOR
SUMMARY JUDGMENT ON THE FORECLOSURE COMPLAINT.
{¶5} In their sole assignment of error, the Sponsellers assert that the trial court erred in
overruling their Civ.R. 60(B) motion. The foundation of their argument is that JP Morgan lacked
standing to initiate the foreclosure action and, thus, the trial court was without subject matter
jurisdiction to enter a judgment, rendering that judgment void ab initio. We do not agree.
{¶6} The Supreme Court of Ohio recently addressed the propriety of raising the issue
of standing in a Civ.R. 60(B)(3) motion. Bank of Am., N.A. v. Kuchta, Slip Opinion No. 2014-
Ohio-4275. In Kuchta, after the complaint was filed, the bank filed a document demonstrating
an assignment of the note and mortgage had occurred after the filing of the complaint. Id. at ¶ 2-
3. The defendants initially answered the foreclosure complaint and asserted lack of standing. Id.
at ¶ 2. Later in the proceedings, they did not respond to the bank’s summary judgment motion
and did not appeal the judgment. Id. at ¶ 3-4. However, they did bring a motion for relief from
judgment pursuant to Civ.R. 60(B)(3). Id. at ¶ 5. After the trial court denied the motion, this
Court reversed that decision concluding that, because standing was jurisdictional, the Kuchtas
would be entitled to relief if the bank’s lack of standing was demonstrated. Id. at ¶ 5-6. This
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Court certified its decision as in conflict with a decision of the Tenth District and the matter was
accepted by the Supreme Court. Id. at ¶ 7. Thereafter, the Supreme Court held the following:
1. An allegation that a plaintiff fraudulently claimed to have standing may not be
asserted as a ground for vacating the judgment under Civ.R. 60(B)(3).
2. Lack of standing is an issue that is cognizable on appeal, and therefore it cannot
be used to collaterally attack a judgment in foreclosure.
3. Although standing is required in order to invoke the jurisdiction of the court of
common pleas over a particular action, lack of standing does not affect the
subject-matter jurisdiction of the court.
Id. at paragraphs one through three of the syllabus.
{¶7} In reaching its conclusion, the Supreme Court determined whether lack of
standing could be a ground for relief under Civ.R. 60(B)(3), and alternatively, the propriety of
granting relief based upon a common law motion to vacate for lack of subject matter jurisdiction.
See id. at ¶ 9-24.
{¶8} With respect to the propriety of filing a motion pursuant to Civ.R. 60(B)(3), the
Supreme Court noted that “the fraud, misrepresentation, or other misconduct contemplated by
Civ.R. 60(B)(3) refers to deceit or other unconscionable conduct committed by a party to obtain
a judgment and does not refer to conduct that would have been a defense to or claim in the case
itself.” Id at ¶ 13. It further noted that “Civ.R. 60(B) exists to resolve injustices that are so great
that they demand a departure from the strict constraints of res judicata.” Id. at ¶ 15. “However,
the rule does not exist to allow a party to obtain relief from his or her own choice to forgo an
appeal from an adverse decision.” Id. In such cases, “a Civ.R. 60(B) motion cannot be used as a
substitute for an appeal and that the doctrine of res judicata applies to such a motion.” Id. at ¶
16. Thus, the Court concluded that res judicata applied as the Kuchtas filed the Civ.R. 60(B)
motion “to relitigate an issue that they had raised at the start of litigation and which they failed to
appeal.” Id.
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{¶9} With respect to whether the lack of standing would render the judgment void ab
initio due to lack of subject matter jurisdiction, the Court concluded that “a particular party’s
standing, or lack thereof, does not affect the subject-matter jurisdiction of the court in which the
party is attempting to obtain relief.” Kuchta, Slip Opinion No. 2014-Ohio-4275, at ¶ 23.
Accordingly, the Court overruled the Kutchas’ argument to the contrary. Id. at ¶ 24.
{¶10} Even assuming that JP Morgan lacked standing, such did not affect the trial
court’s subject matter jurisdiction. Id. at paragraph three of the syllabus. Thus, the trial court’s
judgment was not void ab initio, and the Sponsellers’ argument to the contrary is not well-taken.
See id.; see also id. at ¶ 17. With respect to their Civ.R. 60(B) motion, although we recognize
that, unlike the motion filed by the Kuchtas, the motion for relief from judgment in this case was
brought under Civ.R. 60(B)(4) and (5), we nonetheless conclude that the trial court did not err in
denying the Sponsellers’ motion. The Sponsellers have not demonstrated the existence of an
injustice so great as to warrant a departure from the application of res judicata. See id. at ¶ 15.
Instead, the record merely evidences that the Sponsellers failed to appeal the foreclosure
judgment. However, as noted above, Civ.R. 60(B) “does not exist to allow a party to obtain
relief from his or her own choice to forgo an appeal from an adverse decision.” Id. at ¶ 15.
Given that the Sponsellers did not appeal the judgment in foreclosure and based upon the
Supreme Court precedent cited above, this is not a case where they can collaterally attack the
judgment now based upon the issue of standing. See id. at paragraph two of the syllabus; see
also id. at ¶ 8. Accordingly, the trial court did not err in denying the Sponsellers’ Civ.R. 60(B)
motion.
{¶11} The Sponsellers’ sole assignment of error is overruled.
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III.
{¶12} In light of the foregoing, we affirm the judgment of the Summit County Court of
Common Pleas.
Judgment affirmed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellants.
EVE V. BELFANCE
FOR THE COURT
CARR, J.
MOORE, J.
CONCUR.
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APPEARANCES:
DAVID N. PATTERSON, Attorney at Law, for Appellants.
MATTHEW J. RICHARDSON and ANN MARIE JOHNSON, Attorneys at Law, for Appellee.