Lane v. U.S. Bank, N.A. , 2018 Ohio 3140 ( 2018 )

[Cite as Lane v. U.S. Bank, N.A., 2018-Ohio-3140.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Thomas Lane, :
Plaintiff-Appellant, :
No. 18AP-197
v. : (C.P.C. No. 17CV-11425)
U.S. Bank, N.A. et al., : (ACCELERATED CALENDAR)
Defendants-Appellees. :
D E C I S I O N
Rendered on August 7, 2018
On brief: Thomas Lane, pro se. Argued: Thomas Lane.
On brief: Blank Rome, LLP, Chrissy Dunn Dutton, and
John R. Wirthlin, for appellees. Argued: John R. Wirthlin.
APPEAL from the Franklin County Court of Common Pleas
HORTON, J.
{¶ 1} Plaintiff-appellant, Thomas Lane, pro se, appeals from the decision of the
Franklin County Court of Common Pleas overruling his motion to reconsider his request
for a default judgment and the dismissal of his complaint alleging breach of contract and
negligence claims against defendants-appellees, U.S. Bank, N.A. Trustee ("U.S. Bank"), and
GMAC Mortgage, LLC. We affirm the trial court's decision.
{¶ 2} Lane filed a complaint on December 29, 2017, alleging that U.S. Bank and
GMAC Mortgage, LLC were mortgage loan servicers that had entered into an agreement
with him to modify the loan secured by his property at 2921 Wambli Dr. in Columbus, Ohio.
Lane alleged that the loan modification agreement was "signed and notarized" before being
returned to a representative at Nationwide Home Relief Group, who then sent the
agreement to attorneys for U.S. Bank and GMAC Mortgage, LLC. Lane alleged that they
received three payments from him before breaching the agreement. He attached a letter to
the complaint from an attorney representing U.S. Bank dated November 16, 2009, that
No. 18AP-197 2
appeared to be a cover letter sent with the loan modification agreement. The complaint
stated claims for breach of contract and negligence. As relief, Lane sought $4 million dollars
in compensatory damages, $3 million in punitive damages, and attorney's fees and costs.
(Dec. 29, 2017 Compl.) On February 8, 2018, Lane filed a motion for default judgment on
the grounds that the named defendants had not responded to the complaint or appeared in
the action.
{¶ 3} On February 12, 2018, the trial court overruled the motion and dismissed the
complaint. The trial court noted that the letter attached to Lane's complaint referenced
Franklin C.P. No. 08CVE-7360, a foreclosure case filed by U.S. Bank that had resulted in a
sheriff's sale of Lane's home. The trial court noted that the sale confirmation had been
stayed while the parties "attempted to negotiate a potential loan modification." (Decision
and Entry at 2.) The negotiations were unsuccessful and the judge overseeing the case
issued a confirmation of sale. The trial court noted that Lane had "repeatedly challenged"
the ruling over a number of years in that case. Id. Because the issues raised by Lane had
"been actually and necessarily litigated and determined in a prior action," the trial court
concluded that the matter was subject to dismissal under principles of res judicata. Id.
{¶ 4} Lane filed a motion captioned "Motion for New Trial" on February 21, 2018,
in which he referenced Civ.R. 60(B) and argued that the clerk had failed to attach the entire
loan modification agreement to his original complaint.
{¶ 5} The trial court overruled Lane's motion on March 14, 2018. In its decision,
the trial court noted that the additional exhibits Lane sought to include with his complaint,
including an unsigned loan modification agreement, had appeared in the record since the
entry of its previous decision. However, the trial court concluded that the documents "do
not change the fact that" res judicata precluded Lane from pursuing his claims. (Decision
and Entry at 2.) In a footnote, the trial court noted that Lane had previously filed "a nearly
identical Complaint" in Franklin C.P. No. 17CVH-354, which had been dismissed by the
trial court and the appellate court. Id.
{¶ 6} Lane has appealed and asserts the following assignments of error:
[I.] THE TRIAL COURT ERRORD IN DISMISSING Appellants
CASE Applying RES JUDICATA.
[II.] The Trial COURT ERRORED IN DISMISSING
APPEALLANTS CASE REFERINCING A CASE IN 2008
BASED ON RULE 60 B1 CASE NO. 08CVE7360.
No. 18AP-197 3
(Sic. passim.)
{¶ 7} An appellate court applies an abuse of discretion standard to the review of a
trial court's decision to grant or deny a motion for relief from judgment under Civ.R. 60(B).
GTE Automatic Elec., Inc. v. ARC Indus., Inc., 47 Ohio St. 2d 146 (1976). An abuse of
discretion standard also applies to a decision to grant or deny a motion for default judgment
under Civ.R. 55. Lopez v. Quezada, 10th Dist. No. 13AP-389, 2014-Ohio-367, ¶ 11. "The
applicability of the doctrine of res judicata presents a question of law," and is therefore
reviewed under a de novo standard. Daniel v. Williams, 10th Dist. No. 13AP-155, 2014-
Ohio-273, ¶ 18.
{¶ 8} Lane does not present separate arguments in support of his assignments of
error. His only argument essentially states that he was entitled to a default judgment
because the defendants named in the complaint failed to respond to his complaint or the
interrogatories filed with it. (Appellant's Brief at 8-9.)
{¶ 9} Under Civ.R. 55(A), the failure of "a party against whom a judgment for
affirmative relief is sought" to "plead or otherwise defend" in accordance with the Civil
Rules allows the opposing party to "apply in writing or orally to the court" for a default
judgment. Typically, the entry of default judgment is proper because the failure to appear
or defend against the plaintiff's claims is deemed a confession of their veracity, and,
therefore, an admission of liability. See, e.g., Ohio Valley Radiology Assoc., Inc. v. Ohio
Valley Hosp. Assn., 28 Ohio St. 3d 118, 121 (1986). Nevertheless, the claims stated by the
plaintiff must pass muster under Civ.R. 12(B)(6) as claims upon which relief may be granted
to justify the grant of default judgment. Lopez at ¶ 13. Thus, "where the plaintiff has failed
to state a claim, default judgment on that claim is improper." Id. For this reason, it was
entirely appropriate for the trial court to examine Lane's complaint and determine the
propriety of his request, rather than mechanically grant his Civ.R. 55 motion and enter
default judgment in his favor.
{¶ 10} We may take judicial notice of the docket of Franklin C.P. No. 08CVE-7360
to review the trial court's ruling. See State ex rel. Everhart v. McIntosh, 115 Ohio St. 3d 195,
2007-Ohio-4798, ¶ 8 (citing cases in which courts have taken judicial notice of the dockets
of cases in other courts that are public records available online). As stated, the trial court
declined to grant Lane's request for default judgment because res judicata barred his
No. 18AP-197 4
claims. In State ex rel. Nickoli v. Erie Metroparks, 124 Ohio St. 3d 449, 2010-Ohio-606,
¶ 21, the Supreme Court of Ohio summarized the doctine of res judicata as follows:
In Ohio, "[t]he doctrine of res judicata encompasses the two
related concepts of claim preclusion, also known as res judicata
or estoppel by judgment, and issue preclusion, also known as
collateral estoppel." O'Nesti v. DeBartolo Realty Corp., 113
Ohio St. 3d 59, 2007 Ohio 1102, P 6, 862 N.E.2d 803. "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," whereas issue
preclusion, or collateral estoppel, "precludes the relitigation, in
a second action, of an issue that had been actually and
necessarily litigated and determined in a prior action that was
based on a different cause of action." Ft. Frye Teachers Assn.,
OEA/NEA v. State Emp. Relations Bd. (1998), 81 Ohio St. 3d
392, 395, 1998 Ohio 435, 692 N.E.2d 140; see Holzemer v.
Urbanski (1999), 86 Ohio St. 3d 129, 133, 1999 Ohio 91, 712
N.E.2d 713.
{¶ 11} Res judicata applies where "(1) there was a prior valid judgment on the
merits; (2) the second action involved the same parties as the first action; (3) the present
action raises claims that were or could have been litigated in the prior action; and (4) both
actions arise out of the same transaction or occurrence." Reasoner v. Columbus, 10th Dist.
No. 04AP-800, 2005-Ohio-468, ¶ 5. Application of these principles demonstrates that the
trial court did not err when it concluded that res judicata applied to Lane's action and
declined to enter default judgment in his favor. First, the case was a foreclosure action filed
by U.S. Bank with a valid judgment on the merits. The trial court entered both a decree of
foreclosure and, eventually, a confirmation of the sheriff sale. CitiMortgage, Inc. v.
Roznowski, 139 Ohio St. 3d 299, 2014-Ohio-1984, ¶ 35 (holding that "two judgments are
appealable in foreclosure actions: the order of foreclosure and sale and the order of
confirmation of sale").
{¶ 12} Second, the action involved the same parties. U.S. Bank was the plaintiff and
Lane was a defendant.1 The parties attempted to negotiate a loan modification until
reaching an impasse, at which time U.S. Bank moved the trial court to rule on Lane's
1Although GMAC Mortgage, LLC was not a plaintiff in the prior action, it filed a notice of bankruptcy the
same day that the trial court filed its decision overruling Lane's motion for default judgment. GMAC
Mortgage, LLC argued that because Lane had not filed a proof of claim in the bankruptcy court that retained
jurisdiction over claims against it after its sale to creditors, he was precluded from prosecuting an action
against it. Lane did not contest the notice or address it in this appeal. (Feb. 12, 2018 Notice of Bankruptcy.)
No. 18AP-197 5
objection to the sale and confirm it. Third, Lane's current claims could have been litigated
during the foreclosure action. The loan modification was the subject of ongoing
negotiations until the trial court confirmed the sale. The docket reflects that Lane
unsuccessfully moved the trial court for relief from judgment after the confirmation. Any
meritorious claim arising from the loan modification or its breach could have been raised
at that time. Finally, both actions arise out of the same transaction or occurrence. This
action arose as a challenge to the attempted modification of Lane's original mortgage loan,
and the failure of that attempt at modification occurred during the foreclosure case. See
Matthews v. United States Bank Natl. Assn., 8th Dist. No. 105315, 2017-Ohio-7079, ¶ 11
(holding that a plaintiff's attempt to bring an action for rescission of a mortgage was barred
under principles of res judicata because the claims "arise from the same loan documents at
issue in the foreclosure action and are logically related to that prior action").
{¶ 13} Finally, although Lane fails to address the issue in his brief, we conclude that
the trial court did not err when it overruled his "Motion for New Trial," which it treated as
a motion for reconsideration and relief from judgment under Civ.R. 60(B). Any "mistake"
responsible for the initial absence of the loan modification document was immaterial to the
trial court's ultimate finding that res judicata barred Lane's claims.
{¶ 14} Because the trial court did not err when it applied principles of res judicata
to deny Lane's request for a default judgment or reconsider its dismissal of his complaint,
the assignments of error are overruled. Accordingly, the trial court's judgment is affirmed.
Judgment affirmed.
TYACK and BRUNNER, JJ., concur.
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