Urban v. Folan , 2021 Ohio 3452 ( 2021 )

[Cite as Urban v. Folan, 2021-Ohio-3452.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
JOHN URBAN, Administrator of the Estate C.A. No. 29826
of Thomas A. Collin
Appellee
APPEAL FROM JUDGMENT
v. ENTERED IN THE
COURT OF COMMON PLEAS
JOEANNA ELAINE FOLAN, et al. COUNTY OF SUMMIT, OHIO
CASE No. 2019 CV 00057
Defendant
and
PENNYMAC LOAN SERVICES, LLC
Appellant
DECISION AND JOURNAL ENTRY
Dated: September 30, 2021
SUTTON, Judge.
{¶1} Defendant-Appellant, PennyMac Loan Services, LLC (“PennyMac”), appeals the
judgment of the Summit County Court of Common Pleas, Probate Division. For the reasons
that follow, this Court affirms.
I.
Relevant Background
{¶2} The present appeal arises from the private sale of real property owned by
decedent, Thomas A. Collin, at 9281 North Bedford Road, Macedonia, Ohio. John Urban, as
Administrator of Mr. Collin’s estate, filed a complaint for authority to sell the real property, and
listed the value of the real property as $100,000.00. The court appointed appraiser also valued
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the real property at $100,000.00. Further, Top Elite Financial, Inc., the holder of the mortgage
on the real property, was served with a copy of the complaint for authority to sell the real
property. Subsequent to Mr. Urban filing the complaint, Top Elite Financial, Inc., through
Mortgage Electronic Registration Systems, Inc., assigned the mortgage to PennyMac.
{¶3} PennyMac filed a foreclosure action on the real property in the Summit County
Court of Common Pleas, General Division, and also moved to intervene as a party in the civil
land sale pending in probate court. PennyMac’s motion to intervene was granted and it filed an
answer to the complaint for authority to sell the real property, as well as an amended foreclosure
complaint naming Mr. Urban, in his capacity as administrator of Mr. Collin’s estate, as a
defendant. In response, Mr. Urban filed a motion to dismiss the foreclosure action, which was
granted.
{¶4} Mr. Urban then filed, in the probate court, a motion to accept the inventory
appraisal and an application for an order of private sale for the real property. The probate court
issued a judgment entry granting the private sale which accepted the appraisal value of
$100,000.00 for the real property. After the sale of the real property, Mr. Urban filed form
CV.15, indicating the real property sold for $105,000.001 on December 23, 2019. The record
reveals Mr. Urban did not serve PennyMac with copies of: (1) the motion to accept the inventory
appraisal; (2) the application for an order of private sale for the real property; or (3) form CV.15
indicating the real property had sold. Further, the record does not show PennyMac was served
with the probate court’s December 20, 2019 judgment entry granting the private sale and
accepting the appraised value of $100,000.00 for the real property.
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Although the real property actually sold for $115,000.00, in accordance with the closing
documents, form CV.15 incorrectly indicates it sold for $105,000.00.
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{¶5} On January 22, 2020, PennyMac received net proceeds from the sale of the real
property in the amount of $91,166.23, below the amount of $126,139.60, which was due and
owing on the mortgage at that time.
Motion to Vacate
{¶6} Pursuant to Civ.R. 60(B)(1) and (5), PennyMac filed a motion to vacate the
December 20, 2019 judgment entry granting the private sale and the December 31, 2019
judgment entry confirming the sale and ordering the deed and distribution of the proceeds of the
sale due to a lack of service and notice. In support of its Civ.R. 60(B) motion, PennyMac
attached: (1) the affidavit of Attorney Glenn Algie, PennyMac’s counsel; (2) the affidavit of
Johnny Morton, Foreclosure Operations Specialist for PennyMac; (3) PennyMac’s broker’s price
opinion (“BPO”) dated January 27, 2020; and (4) payoff demand statements for the mortgage on
the property. The BPO, which specifically indicates, “[t]his is a BPO market analysis. This is
not an appraisal [,]” valued the “probable sale price” of the real property at $155,000.00.
{¶7} Mr. Urban, in response to PennyMac’s Civ.R. 60(B) motion, filed a brief in
opposition which included, among other things, the affidavit of Armand Rossi, a realtor with
ERA Lentz Associates, Inc. In his affidavit, Mr. Rossi averred he is the realtor who represented
Mr. Urban in the sale of Mr. Collin’s real property at 9281 North Bedford Road. In selling the
real property, Mr. Rossi looked at five comparable properties with average values of $86,307.00.
Mr. Rossi also indicated Summit County had assessed the value of the real property at
$86,490.00. Further, Mr. Rossi averred the real property was appraised at $100,000.00, by the
real estate appraiser appointed by the probate court, and the City of Macedonia had found a total
of six violations relating to the real property. Lastly, Mr. Rossi averred, based upon forty-eight
years as a realtor, the purchase price of $115,000.00, was “good and acceptable.”
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The Judgment Entry
{¶8} ln its August 3, 2020 judgment entry, the probate court found: (1) PennyMac’s
Civ.R. 60(B) motion was timely filed; and (2) PennyMac demonstrated it was entitled to relief
pursuant to Civ.R. 60(B)(1) for “mistake, inadvertence, surprise or excusable neglect.” In so
doing, the probate court reasoned, “[c]learly, PennyMac’s failure to object to [Mr. Urban’s]
[motion and application regarding the inventory appraisal and private sale] was due to excusable
neglect as [Mr. Urban] failed to serve a copy of both the [m]otion and [a]pplication upon
PennyMac.”
{¶9} The probate court, however, determined that PennyMac failed to demonstrate a
meritorious defense or claim, stating:
***
In order to demonstrate that it has a meritorious defense or claim to present if
relief is granted, PennyMac relies on an appraisal that it obtained on January 27,
2020, to assert that the market value of the property was actually $155,000.00,
well above the amount accepted by [Mr. Urban]. However, the [c]ourt finds that
the appraisal that PennyMac attached as Exhibit A to its [Civ.R. 60(B) motion] is
actually a BPO, known as a broker’s price opinion, and not [a] full appraisal of
the North Bedford Road property. The brokers price opinion has a number of
misstatement[s] of [fact] and flaws on its face. First, the BPO incorrectly states
that the borrower is Thomas Collin, fails to take into consideration that the North
Bedford Road property was listed for sale within the last [twelve] months, and
that it was actually sold within the last twelve months to the named owners of the
property, Justin Jachna and Caitlin Connick. Further, the BPO was based only
on an inspection of the exterior of the property and failed to take into
consideration the numerous property violations that had been cited by the City of
Macedonia. Additionally, the BPO was based on only 3 out of 26 comparable
sales in the property’s neighborhood within the past twelve months. Finally, the 5
competitive listings in the property’s neighborhood currently on the market were
all listed in the price range from $99,000.00 to $154,900.00.
The North Bedford Road property sold for $115,000.00, an amount greater than
the appraised value set by the appraiser appointed by this [c]ourt in the estate. A
review of the [a]ffidavit of Armand Rossi, attached as Exhibit E to [Mr. Urban’s
brief in opposition], shows [Mr.] Rossi has been a licensed realtor in the State of
Ohio for over forty-eight years. [Mr.] Rossi was hired by [Mr. Urban] to list and
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sell the [North] Bedford Road property. [Mr. Rossi] used five comparable sales,
one of which was directly across the street from the subject property, to arrive at
an average of [$87.71] per square foot. Using the same valuation per square foot,
[Mr.] Rossi determined the subject property would have a value of $86,307.00,
nearly the same as the Summit County Auditor’s value.
***
To say that the value of the North Bedford Road Property was actually
$155,000.00 and that it would have sold for that amount is purely speculative.
***
(Emphasis added.) Thus, based upon the above-stated reasoning, the probate court denied
PennyMac’s Civ.R. 60(B) motion.
{¶10} It is from this judgment entry PennyMac appeals, citing two assignments of error
for our review.
Mootness
{¶11} As a preliminary matter, we address the issue of whether PennyMac’s
assignments of error are moot because it failed to seek a stay of the distribution of the proceeds
from the sale of the real property and, thus, has no remedy if the judgment entry approving the
sale is vacated. It is well settled that, “[a]ppellate courts will not review questions that do not
involve live controversies.” Summit Servicing Agency, LLC v. Hunt, 9th Dist. Summit No.
28699, 2018-Ohio-2494, ¶ 10, quoting Bankers Trust Co. of California, N.A. v. Tutin, 9th Dist.
Summit No. 24329, 2009-Ohio-1333, ¶ 6, citing Tschantz v. Ferguson, 57 Ohio St.3d 131, 133
(1991). “When no live controversy exists, the appeal must be dismissed as moot.” Id. at ¶ 10,
citing Tutin at ¶ 6, citing Lorain Cty. Bd. of Commrs. v. U.S. Fire Ins. Co., 81 Ohio App.3d 263,
266-267 (9th Dist.1992).
{¶12} “Where * * * [a] judgment is voluntarily paid and satisfied, such payment puts an
end to the controversy, and takes away from the defendant the right to appeal or prosecute error
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or even to move for vacation of the judgment.” Summit Servicing Agency, LLC at ¶ 12. “A
judgment is voluntarily satisfied ‘where the party fails to seek a stay prior to the satisfaction of
judgment.’” Id. at ¶ 13, citing CommuniCare Health Servs. v. Murvine, 9th Dist. Summit No.
23557, 2007-Ohio-4651, ¶ 20. (Emphasis added.)
{¶13} Here, although PennyMac did not seek a stay of the distribution of proceeds from
the sale of the real property, the record reveals PennyMac had no knowledge of the December
23, 2019 sale until it received $91,166.23 in sale proceeds on January 22, 2020. Specifically, in
his affidavit, Attorney Glenn Algie averred, “I only learned about the above-referenced pleadings
in the third week of January 2020 when I received the proceeds of the already-completed sale of
the property. I immediately overnighted the funds to PennyMac for handling on January 21,
2020.” (Emphasis added.) Under these circumstances, it was not actually possible for
PennyMac to seek a timely stay of the distribution of proceeds from the sale of the real property.
Moreover, PennyMac contends, if the judgment entry granting the private sale and accepting the
appraised value of $100,000.00 for the real property is vacated, PennyMac could seek relief
against Tom Collin’s estate itself, pursuant to R.C. 2127.27, because Mr. Urban, as administrator
of the estate, did not faithfully discharge his duties by failing to serve notice to PennyMac of the
sale and appraisal value of the real property.2 Indeed, this type of remedy, against the estate
2
R.C. 2127.27 states, in relevant part: “[u]pon the return and approval of the
appraisement * * * the court shall require the executor, administrator, or guardian to execute a
bond with two or more personal sureties, or one or more corporate sureties, whose qualifications
shall be those provided by section 2109.17 of the Revised Code. The bond shall be payable to the
state in an amount that the court considers sufficient, having regard to the amount of real
property to be sold, its appraised value, the amount of the original bond given by the executor,
administrator, or guardian, and the distribution to be made of the proceeds arising from the sale.
The bond shall be conditioned for the faithful discharge of the executor's, administrator's, or
guardian's duties and the payment of, and accounting for, all moneys arising from the sale
according to law.”
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itself, would not implicate the title of the real property passed to the third-party purchasers. See
R.C. 2325.03 (“The title to property, which title is the subject of a final judgment or order sought
to be vacated, modified, or set aside by any type of proceeding or attack and which title has, by,
in consequence of, or in reliance upon the final judgment or order, passed to a purchaser in good
faith, shall not be affected by the proceeding or attack; nor shall the title to property that is sold
before judgment under an attachment be affected by the proceeding or attack.”)
{¶14} Thus, because there remains a live controversy, PennyMac’s appeal is not moot.
II.
ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED IN DENYING [PENNYMAC’S] CIV.R.
60(B) MOTION [] TO VACATE THE ORDER CONFIRMING SALE []
WHEN IT REACHED THE ULTIMATE MERITS OF THE CASE
INSTEAD OF DECIDING WHETHER A MERITORIOUS DEFENSE WAS
PRESENTED BY [PENNYMAC].
{¶15} In its first assignment of error, PennyMac argues the trial court erred in denying
its Civ.R. 60(B) motion. For the reasons that follow, PennyMac’s argument is not well-taken.
{¶16} “The decision to grant or deny a motion for relief from judgment pursuant to
Civ.R. 60(B) lies in the sound discretion of the trial court and will not be disturbed absent an
abuse of discretion.” State v. Hulgin, 9th Dist. Summit No. 26719, 2013-Ohio-2794, ¶ 7, citing
Strack v. Pelton, 70 Ohio St.3d 172, 174 (1994). An abuse of discretion indicates the trial
court’s decision was unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore, 5
Ohio St.3d 217, 219 (1983).
{¶17} Civ.R. 60(B) allows a court to relieve a party from a final judgment, order, or
proceeding under certain circumstances. Such circumstances include: “(1) mistake,
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inadvertence, surprise or excusable neglect; * * * or (5) any other reason justifying relief from
the judgment.” Civ.R. 60(B). To prevail on a 60(B) motion, the movant must demonstrate that:
(1) the party has a meritorious defense or claim to present if relief is granted; (2)
the party is entitled to relief under one of the grounds stated in Civ.R. 60(B)(1)
through (5); and (3) the motion is made within a reasonable time, and, where the
grounds of relief are Civ.R. 60(B)(1), (2) or (3), not more than one year after the
judgment, order or proceeding was entered or taken.
GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St.2d 146 (1976), paragraph two of
the syllabus. “Civ.R. 60(B) relief is improper if any one of the foregoing requirements is not
satisfied.” State ex rel. Richard v. Seidner, 76 Ohio St.3d 149, 151 (1996).
{¶18} Further, “[u]nder Civ.R. 60(B), a movant’s burden is only to allege a meritorious
defense, not to prove that he will prevail on that defense.” Rose Chevrolet, Inc. v. Adams, 36
Ohio St.3d 17, 20 (1988). However, “[i]n order to present a meritorious defense, a [movant]
must introduce credible evidence from which reasonable minds might reach different
conclusions upon the issue involved.” Cook Family Invests. v. Billings, 9th Dist. Lorain Nos.
05CA008689, 05CA008691, 2006-Ohio-764, ¶ 18. Indeed, a movant must “allege supporting
operative facts with enough specificity to allow the court to decide that the movant has a defense
he could have successfully argued at trial.” Climbing Higher Ent., Inc. v. Forney, 9th Dist.
Summit No. 21142, 2002-Ohio-6295, ¶ 13.
{¶19} In the present matter, the trial court reviewed the BPO attached to PennyMac’s
Civ.R. 60(B) motion and due to several errors on its face and other noted deficiencies,
determined PennyMac did not have a meritorious defense to present if the requested relief was
granted. Specifically, the trial court took issue with the following: (1) the BPO was not a full
appraisal, as it was only based upon an inspection of the property’s exterior; (2) the BPO
contained errors regarding the borrower’s name, the fact the property had been listed for sale in
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the past 12 months, and the fact the property had actually sold; (3) the BPO did not take into
account any of the property violations cited by the City of Macedonia; and (4) the BPO was only
based upon 3 out of 26 comparable sales in the past 12 months. In essence, the BPO was not
credible evidence of a meritorious defense, i.e., that the property was valued at a higher amount
than it actually sold for in the private sale. As such, in reviewing this record, we cannot say the
trial court acted unreasonably, arbitrarily, or unconscionably in denying PennyMac’s Civ.R.
60(B) motion.
{¶20} Accordingly, PennyMac’s first assignment of error is overruled.
ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED IN DENYING [PENNYMAC’S] CIV.R.
60(B) MOTION [] TO VACATE THE ORDER CONFIRMING SALE []
WHEN IT DENIED THE MOTION WITHOUT FIRST CONDUCTING A
HEARING TO DETERMINE WHETHER A MERITORIOUS DEFENSE
WAS PRESENTED BY [PENNYMAC].
{¶21} In its second assignment of error, PennyMac argues the trial court erred in failing
to conduct a hearing on whether a meritorious defense was presented in the Civ.R. 60(B) motion.
We disagree.
{¶22} This Court has previously stated, “a party moving for relief from judgment under
Civ.R. 60(B) is not automatically entitled to an evidentiary hearing.” Miller v. Miller, 9th Dist.
Summit No. 21770, 2004-Ohio-1989, ¶ 9. In so doing, we explained:
If * * * the material submitted by the movant contains allegations of operative
facts demonstrating that relief is warranted, the trial court should grant the movant
a hearing to take evidence and either verify or discredit the asserted facts. If, on
the other hand, the material submitted by the movant does not provide operative
facts which demonstrate that relief is warranted, the trial court may deny the
motion without holding a hearing. (Citations omitted.)
Id. Further, “[t]he party requesting relief from judgment bears the burden of asserting operative
facts that demonstrate [] a meritorious defense that justifies relief from judgment.” Id.10
Importantly, “[a]ll operative facts must be presented with the motion; the movant cannot wait to
present operative facts at a hearing.” Id.{¶23} As discussed above, the trial court determined the BPO attached to PennyMac’s
Civ.R. 60(B) motion did not constitute credible evidence of a meritorious defense because of
numerous misstatements and deficiencies which are identified in the trial court’s judgment entry,
as well as the speculative nature of PennyMac’s valuation of the real property. Thus, because the
BPO did not contain allegations of operative facts demonstrating that relief is warranted, the trial
court’s denial of the Civ.R. 60(B) motion, without a hearing, does not constitute an abuse of
discretion.
{¶24} Accordingly, PennyMac’s second assignment of error is overruled.
III.
{¶25} For the reasons stated above, PennyMac’s two assignments of error are
overruled. The Judgment of the Summit County Court of Common Pleas, Probate Division, is
affirmed.
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
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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 Appellant.
BETTY SUTTON
FOR THE COURT
CARR, P. J.
TEODOSIO, J.
CONCUR.
APPEARANCES:
WILLIAM L. PURTELL and JOHN R. WIRTHLIN, Attorneys at Law, for Appellant.
JAMES L. NABORS and RANDY TAYLOR, Attorneys at Law, for Appellee.