Balfour v. Haymon

[Cite as Balfour v. Haymon, 2021-Ohio-3499.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Debora K. Balfour, :
Plaintiff-Appellee, : No. 20AP-323
No. 20AP-327
v. : (C.P.C. No. 19CV-5884)
Joseph V. Haymon et al., : (ACCELERATED CALENDAR)
Defendants-Appellants. :
D E C I S I O N
Rendered on September 30, 2021
On brief: Hrabcak & Company, L.P.A., Michael Hrabcak,
and Gregory A. Wetzel, for appellee. Argued: Gregory A.
Wetzel.
On brief: O'Reilly Law Offices, and Michael J. O'Reilly, for
appellant Joseph V. Haymon. Argued: Michael J. O'Reilly.
APPEALS from the Franklin County Court of Common Pleas
JAMISON, J.
{¶ 1} Defendants-appellants, Joseph V. Haymon, Fenwick and Associates LLC,
and Bungaplex LLC, appeal from two separate judgments issued by the Franklin County
Court of Common Pleas, in favor of plaintiff-appellee, Debora K. Balfour. For the reasons
that follow, we reverse.
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} There is no dispute that on or about September 12, 2014, Balfour and
Haymon entered into an agreement whereby Balfour provided certain funds to Haymon, in
return for Haymon's promise to perform certain renovations to real property owned by an
Ohio limited liability company known as Fenwick and Associates, LLC ("Fenwick"). Fenwick
Nos. 20AP-323 and 20AP-327 2
is wholly owned and operated by Haymon.1 The subject real property is located at 410 East
15th Avenue, Columbus, Ohio.
{¶ 3} On April 26, 2017, Fenwick executed a quit-claim deed ("Balfour deed"),
purporting to transfer all of Fenwick's ownership interest in real property to Balfour for the
sum of $25,000. The Balfour deed, attached to Balfour's complaint as Exhibit B, was not
recorded until August 29, 2017.
{¶ 4} There is no dispute that on that same date, August 29, 2017, Fenwick also
executed a quit-claim deed ("Bungaplex deed"), purporting to transfer an ownership interest
in the same real property to an Ohio limited liability known as Bungaplex LLC
("Bungaplex"), in consideration of the sum of $25,000. Bungaplex is also wholly owned and
operated by Haymon. The quit-claim deed was recorded on August 29, 2017.
{¶ 5} On July 19, 2019, Balfour filed an 11 count complaint against Haymon,
Fenwick, and Bungaplex. According to Balfour's complaint, she loaned Haymon or his
entities a total of $143,000 for the renovation project, but Haymon and his entities never
completed the renovations as promised. The complaint sought a declaration as to the
validity of the competing deeds to the property and an order of ejectment against Haymon.
The remaining counts alleged fraud, conversion, breach of contract, slander of title, lis
pendens, civil theft, unjust enrichment, and promissory estoppel. The allegations of the
complaint specific to the claims for declaratory judgment are as follows:
17. At the time of the Bungaplex Deed, Defendant Fenwick no
longer had any rights, title, or interest in the Subject Property;
it had already conveyed those to Plaintiff Balfour.
18. The Bungaplex Deed was fraudulent and is void on its face.
19. There is a real and justiciable controversy that exists as to
the validity of the Balfour Deed, the invalidity of the
Bungaplex Deed, and the ownership of the Subject Property;
and speedy relief is necessary for the preservation of Plaintiff
Balfour's rights and interests in the Subject Property.
20. Plaintiff Balfour's rights and interest in the Subject
Property may be otherwise lost or impaired if Defendants
continue to be in possession and act as owner of the Subject
Property.
1 A copy of the quit-claim deed memorializing the transfer of ownership from Cheryl M. Fenwick to Fenwick
is attached to Balfour's complaint as Exhibit A. The quit- claim deed was executed on August 5, 2014 and
recorded September 12, 2014.
Nos. 20AP-323 and 20AP-327 3
21. Plaintiff Balfour respectfully requests the Court declare the
Balfour Deed to be valid, declare the Bungaplex Deed to be
invalid, declare Plaintiff Balfour is the owner of the Subject
Property in fee simple absolute, and order the transfer of the
Subject Property to Plaintiff Balfour.
{¶ 6} Appellants' answer contains the following admissions and denials:
17. This Defendant denies the allegations contained in
Complaint Paragraph 17.
18. This Defendant denies the allegations contained in
Complaint Paragraph 18.
19. This Defendant in response to Complaint Paragraph 19
admits that a declaratory judgment is needed as the parties
disagree on many issues but Defendant disagrees on what the
Court should declare.
20. This Defendant denies the allegations contained in
Complaint Paragraph 20.
21. This Defendant in response to Paragraph 21 of the
Complaint states that a declaratory judgment is needed as the
parties disagree on many issues, but Defendant disagrees with
Plaintiff's assertion as to what the Court should declare.
{¶ 7} On February 7, 2020, Balfour filed a motion for judgment on the pleadings,
pursuant to Civ.R. 12(C), on her claims for declaratory relief and ejectment. On March 3,
2020, appellants filed a response wherein appellants claimed that it was the parties
understanding that the Balfour deed was executed as security for the funds she advanced for
renovations. The trial court issued a decision and entry on March 16, 2020, granting
Balfour's motion for judgment in the pleadings. The trial court made the following
determination as to the claim for declaratory relief:
Due to the conveyance in the Balfour Deed, Defendant
Fenwick had no interest in the Subject Property to later
convey to Defendant Bungaplex. The Balfour Deed quit-
claimed the entire subject property to Plaintiff Balfour
"together with all the improvements thereon and
appurtenances thereunto belonging." Ex. B. The only
reservation is mineral rights. Thus, the property rights at issue
in this case were deeded to Plaintiff Balfour.
Moreover, Defendant Haymon and Fenwick, as the grantor of
the deed, are bound by the deed under the doctrine of estopple
by deed. Defendant Haymon and Fenwick are bound by the
Balfour Deed's provisions and are "estopped to deny their
Nos. 20AP-323 and 20AP-327 4
legal effect." * * * Thus, Defendants have no grounds to deny
the Subject Property was conveyed to Plaintiff Balfour.
Based on the above analysis, The Balfour Deed is superior to
the Bungaplex Deed because Defendant Fenwick had no
interest to subsequently convey in the Bungaplex Deed, and
Defendants are estopped from denying the conveyance to
Plaintiff Balfour.
(Mar. 16, 2020 Decision & Entry at 4-5.)
{¶ 8} The trial court went on to issue the following ruling on the ejectment action:
As shown in declaratory judgment analysis, Plaintiff Balfour
has a legal estate in the real property and a possessory right
through the Balfour Deed. The identity of the real property
has been established with certainty in the Balfour Deed and
Plaintiffs Complaint which provided the Subject Property's
physical address and Franklin County Permanent Parcel
Number. Defendants have kept Plaintiff Balfour from
possessing the real property by Defendant Haymon residing
at the Subject Property when he has no legal right to do so.
Thus, the statutory requirements have been satisfied and
Plaintiff Balfour is entitled to judgment on the pleadings.
(Decision & Entry at 6.)2
{¶ 9} On May 14, 2020, the trial court granted appellants' May 13, 2020 motion to
stay execution of the ejectment. On May 18, 2020, Balfour filed a motion, pursuant to Civ.R.
41(A)(2), seeking an order dismissing the remaining claims in her complaint, without
prejudice. The trial court granted Balfour's motion on May 19, 2020 and dismissed Balfour's
remaining claims against appellants, without prejudice.
{¶ 10} Appellants timely appealed to this court from the two judgments issued by
the trial court. On June 23, 2020, this court issued a journal entry consolidating case Nos.
20AP-323 and 20AP-327 "for purposes of * * * oral argument, and determination."
Accordingly, we shall determine both cases in a single decision.
II. ASSIGNMENTS OF ERROR
{¶ 11} Appellants assigns the following as trial court error:
ASSIGNMENT OF ERROR NO. 1
THE TRIAL COURT ERRED TO THE PREJUDICE OF
APPELLANT IN GRANTING APPELLEE JUDGMENT ON
2The trial court concluded that the pleadings left no doubt as to deliver and acceptance of the Balfour deed.
That finding is not the subject of this appeal.
Nos. 20AP-323 and 20AP-327 5
THE PLEADINGS WHEN DEFENDANT HAD PLED
AFFIRMATIVE DEFENSES THE APPELLEE NEITHER
ADDRESSED NOR RESOLVED.
ASSIGNMENT OF ERROR NO. 2
THE TRIAL COURT ERRED IN ALLOWING PLAINTIFF TO
USE A MOTION TO DISMISS, TO DISMISS LESS THAN ALL
CLAIMS INCLUDED IN THE COMPLAINT.
ASSIGNMENT OF ERROR NO. 3
THE TRIAL COURT ERRED IN NOT CONSTRUING THE
AFFIRMATIVE DEFENSES ASSERTED BY DEFENDANT AS
COUNTERCLAIMS, WHEN ALLOWING PLAINTIFF TO
DISMISS HER REMAINING CLAIMS.
ASSIGNMENT OF ERROR NO. 4
THE TRIAL COURT ERRED IN SUMMARILY GRANTING
PLAINTIFF'S MOTION TO DISMISS SOME BUT NOT ALL
COUNTS, WITHOUT DUE PROCESS.
ASSIGNMENT OF ERROR NO. 5
THE TRIAL COURT ABUSED ITS DISCRETION IN
GRANTING JUDGMENT ON THE PLEADINGS ON
EJECTMENT WHEN THE DEED IN QUESTION SHOULD
HAVE BEEN CONSTRUED AS A MORTGAGE.
III. STANDARD OF REVIEW
{¶ 12} "A party may file a motion for judgment on the pleadings under Civ.R. 12(C),
'[a]fter the pleadings are closed but within such time as not to delay the trial.' " Carasalina,
LLC v. Smith Phillips & Assocs., 10th Dist. No. 13AP-1027, 2014-Ohio-2423, ¶ 8, quoting
Franks v. Ohio Dept. of Rehab. & Corr., 195 Ohio App.3d 114, 2011-Ohio-2048, ¶ 5 (10th
Dist.) "In ruling on a motion for judgment on the pleadings, the court is permitted to
consider both the complaint and answer." Carasalina at ¶ 8, citing State ex rel. Midwest
Pride IV, Inc. v. Pontious, 75 Ohio St.3d 565, 570 (1996). See also State ex rel. Fiser v.
Kolesar, __ Ohio St.3d __, 2020-Ohio-5483, ¶ 8. When presented with such a motion, a
trial court must construe all the material allegations of the pleadings as true, and must draw
all reasonable inferences in favor of the nonmoving party. Peterson v. Teodosio, 34 Ohio
St.2d 161, 165 (1973); Whaley v. Franklin Cty. Bd. of Commrs., 92 Ohio St.3d 574, 581
(2001). A motion for judgment on the pleadings must "be granted when, after viewing the
allegations and reasonable inferences therefrom in the light most favorable to the non-
Nos. 20AP-323 and 20AP-327 6
moving party, the moving party is entitled to judgment as a matter of law." Brown v. Wood
Cty. Bd. of Elections, 79 Ohio App.3d 474, 477 (6th Dist.1992), citing Peterson at 174.
{¶ 13} "There is little caselaw discussing the standard of review of judgment on the
pleadings initiated by the plaintiff, but presumably it would involve the same type of
considerations used in resolving a defendant's motion for judgment on the pleadings:
judgment in favor of the plaintiff would be appropriate if (1) the trial court construes the
material allegations in the complaint and the answer in favor of the nonmoving party, and
(2) finds beyond doubt that the defendant could prove no set of facts to support any defense
to the claims in the complaint." Trinity Health Sys. v. MDX Corp., 180 Ohio App.3d 815,
2009-Ohio-417, ¶ 18 (7th Dist.). Thus, a party seeking affirmative relief would employ Civ.R.
12(C) "where the opposing party had admitted to all the salient facts of the complaint,
thereby admitting liability, and has no arguable defense." Id.{¶ 14} The questions presented by a motion for judgment on the pleadings are
purely legal. Kolesar at ¶ 8. A judgment on the pleadings dismissing an action is subject to
a de novo standard of review in the court of appeals. Carasalina at ¶ 8, citing RotoSolutions,
Inc. v. Crane Plastics Siding, LLC, 10th Dist. No. 13AP-1, 2013-Ohio-4343, ¶ 13, citing
Franks at ¶ 5.
IV. LEGAL ANALYSIS
A. Preliminary Issues
1. Standing
{¶ 15} Balfour concedes that Haymon has standing to appeal from the order of
ejectment due to his possessory interest in the real property at issue. Balfour has not moved
this court to dismiss the appeal from the March 16, 2020 judgment. Balfour argues,
however, that Haymon does not have standing, in his individual capacity, to appeal from the
declaratory judgment issued by the trial court on March 16, 2020, because only Fenwick and
Bungaplex have claimed an ownership interest in the real property at issue.
{¶ 16} As a general rule, only a party aggrieved by a trial court's judgment has
standing to appeal. Midwest Fireworks Mfg. Co., Inc. v. Deerfield Twp. Bd. of Zoning
Appeals, 91 Ohio St.3d 174 (2001). A party is "aggrieved" if it has an interest in the subject
matter of the litigation that is "immediate and pecuniary" rather than "a remote
consequence of the judgment." Id. at 177.
Nos. 20AP-323 and 20AP-327 7
{¶ 17} An action to quiet title to real property is governed by R.C. 5303.01, which
provides in relevant part that "[a]n action may be brought by a person in possession of real
property, by himself or tenant, against any person who claims an interest therein adverse to
him, for the purpose of determining such adverse interest." The pleadings establish that
Haymon and Bungaplex are in possession of the real property subject to the competing
claims of ownership in this case. Thus, Haymon is aggrieved by the declaratory judgment
and he has standing, in his individual capacity, to appeal from the March 16, 2020 judgment.
See Catley v. Boles, 11th Dist. No. 2019-G-0198, 2020-Ohio-240 (Administrator had
standing to maintain a quiet title action because the complaint alleged that the
administrator and the decedent resided on and have been in possession of the property.).
{¶ 18} Even if we were to conclude that Haymon does not have standing to
personally appeal from the declaratory judgment, we find that Fenwick and Bungaplex are
also appellants in this case. The notices of appeal filed in this case are captioned as follows:
DEBORA KAY BALFOUR,
Plaintiff Case No. 19CV005884
Vs.
JOSEPH VIRGIL HAYMON, et.al.,
Defendants
{¶ 19} App.R. 3(D) provides that the "notice of appeal shall specify the party or
parties taking the appeal." Here, the captions contain the "et al." designation, but the text
of the notices identify only Haymon as appellant.
{¶ 20} In Transamerica Ins Co., v. Nolan, 72 Ohio St.3d 320 (1995), the notice of
appeal designated the appellants as "Dennis Wallace et al." Id. at 321. The court of appeals
held that the notice failed to comply with App.R. 3(D), and dismissed the appeal of Linda
Wallace. The Supreme Court of Ohio held that the court of appeals abused its discretion by
refusing to consider the appeal of Linda Wallace. Id. at 322. In so holding the Supreme
Court noted that the only jurisdictional requirement for a valid appeal under App.R. 3(A) is
the timely filing of a notice of appeal. Id. Thus, when presented with other defects in the
notice of appeal, a court of appeals is vested with discretion to determine whether sanctions,
including dismissal are warranted. Id. See also Grand Council of Ohio v. Owens, 86 Ohio
App.3d 215, 219 (10th Dist.1993) (This court advised that the better practice is to name all
the parties appealing rather than simply using "et al." designation.).
Nos. 20AP-323 and 20AP-327 8
{¶ 21} As previously noted, Haymon is the sole member of both Fenwick and
Bungaplex. When an issue of party identification arose in the trial court, the parties filed
the following stipulation:
On or about November 21, 2019, Defendant Joseph Virgil
Haymon filed an Answer to Plaintiff Debora Balfour's
Complaint. While the Answer was captioned "Answer of
Defendant Joseph Virgil Haymon," it was intended to serve as
an answer on behalf of Defendant Bungaplex LLC and
Defendant Fenwick Associates LLC, too.
Thus, the parties stipulate and agree that the Answer filed on
November 21, 2019 shall inure to Defendant Bungaplex LLC
and Defendant Fenwick Associates LLC. Those parties have
appeared and answered Plaintiff Balfour's Complaint and are
not in default.
(Feb. 3, 2020 Stipulation.)
{¶ 22} Because the parties in this action have acknowledged that Haymon has the
capacity to file pleadings, motions, memoranda and other papers in behalf of Fenwick and
Bungaplex, and because Balfour has previously stipulated that Haymon may do so without
specifically identifying Fenwick and Bungaplex in the caption, we perceive no prejudice to
Balfour in treating Fenwick and Bungaplex as appellants. Balfour has not claimed that their
arguments in response to the assignments of error would be different had Haymon
specifically identified Fenwick and Bungplex as appellants in either notice of appeal.
{¶ 23} For the foregoing reasons, we find that Haymon, Fenwick, and Bungaplex are
appellants in these coordinated cases.
2. Balfour's Motion to Strike
{¶ 24} Balfour's seeks an order striking "Section I" of appellants' merit brief and the
appendix to the merit brief on the grounds that the evidentiary material in the appendix and
the factual assertion in the merit brief "were not before the trial court." (Nov. 24, 2020 Mot.
to Strike at 3.) In her merit brief, Balfour states that such facts were not "part of the record
before the trial court when it rendered any of its relevant decisions." (Appellee's Merit Brief
at 8.) On November 25, 2020, this court issued a journal entry stating that "[a]ppellee's
November 24, 2020 motion to strike portions of appellant's brief shall be submitted to the
Nos. 20AP-323 and 20AP-327 9
court at such time as the court determines the merits of these appeals." The motion is now
ripe for a ruling.
{¶ 25} It is axiomatic that " ' "[a] reviewing court cannot add matter to the record
before it, which was not a part of the trial court's proceedings, and then decide the appeal
on the basis of the new matter." ' " JPMorgan Chase Bank, N.A. v. Liggins, 10th Dist. No.
15AP-242, 2016-Ohio-3528, ¶ 14, quoting Wiltz v. Clark Schaefer Hackett & Co., 10th Dist.
No. 11AP-64, 2011-Ohio-5616, ¶ 13, quoting Morgan v. Eads, 104 Ohio St.3d 142, 2004-
Ohio-6110, ¶ 13, quoting State v. Ishmail, 54 Ohio St.2d 402 (1978), paragraph one of the
syllabus. To the extent that Balfour's motion to strike pertains to the evidentiary materials
attached as an appendix to appellants' merit brief and certain factual assertions in their
merit brief that are not contained in the pleadings, we agree that those materials and
assertions were not part of the record when the trial court ruled on the March 16, 2020
judgment, and they shall not be considered in our review of that judgment.
{¶ 26} We disagree, however, with Balfour's contention that none of the factual
assertions in Section I of appellants' brief are part of the record in this appeal. The record
shows that on May 18, 2020, the same day Balfour filed her Civ.R. 41(A)(2) motion, Haymon
filed a "motion to refer to magistrate for mediation." Haymon's May 7, 2020 affidavit was
attached as an exhibit to the motion.3 Thus, the averments in Haymon's May 7, 2020
affidavit were part of the trial court record when the trial court ruled on Balfour's
3 The affidavit reads in relevant part as follows:
2. I am residing at said real estate. At the moment I am the only person residing there. The property requires
up to $15,000 in work at a minimum, before it would have a certificate of occupancy allowing others to be able
lawfully to live there.
3. If I vacate the property, given the character of the neighborhood, it will almost certainly be broken into and
vandalized or be taken over by squatters
4. As I have an interest in preserving the value of the property and am not charging for my protective or
construction services I submit it is in the best interest of both the Plaintiff, Deborah Balfour as well as the
Defendant(s) in this action that I be allowed to remain in occupancy for the time being pending the arrival of
this case at a final appealable order (as well as in the pendency of an appeal if there should be one).
5. I will explain this further in a longer affidavit but I wish to inform the Court that the deed I gave to Deborah
Balfour was expressly understood between us to be a security instrument for the repayment of money to her
and was not understood by either of us to be an absolute deed fully transferring ownership.
6. Deborah and I had a contract, or partnership, or loan agreement regarding the property referenced above
and a property at 3104 Twin Circle Street, Moore, Oklahoma 73160. Deborah was to be the money "partner"
and I the "work partner". Deborah breached the agreement by withholding the final $15,000 needed to finish
the Ohio property and by maliciously thwarting a sale we had arranged of the Oklahoma property. (Defs.'
Ex. A, attached to May 18, 2020 Mot. to Refer.)
Nos. 20AP-323 and 20AP-327 10
Civ.R. 41(A)(2) motion to dismiss and we shall consider those averments in our review of
the May 19, 2020 judgment only.
{¶ 27} For the foregoing reasons, the motion to strike is granted, in part, as to the
appendix and the relevant portions of Section I in appellants' merit brief.
B. Assignments of Error
{¶ 28} In order to facilitate the analysis of this appeal, we shall consider the
assignments of error out of order.
1. Appellants' First and Fifth Assignments of Error
{¶ 29} Appellants first and fifth assignments of error pertain to the March 16, 2020
judgment, and we shall consider them jointly. In the first and fifth assignments of error
appellants argue the trial court erred in declaring the validity of the competing deeds and
ordering Haymon's ejectment without considering the affirmative defenses pleaded by
appellants and without considering whether the facts alleged in the pleadings permit the
inference that the Balfour deed was a mortgage.
a. Declaratory Judgment
{¶ 30} Appellants contend that the trial court erred in granting judgment on the
pleadings because the pleadings give rise to a factual issue whether the parties intended the
Balfour deed as a mortgage. We agree.
{¶ 31} Appellants first contend that the trial court erred by failing to recognize that
Fenwick executed the Balfour deed for the sole purpose of securing appellants' performance
of the renovation contract and recoupment of the loan proceeds. The material factual
allegations in the complaint are as follows:
7. Plaintiff Balfour, a friend of Defendant Haymon, agreed to
loan monies for Defendant Haymon and/or his entities to use
to renovate the Subject Property.
8. Specifically, Plaintiff Balfour loaned Defendant Haymon
and/or his entities additional sums for a total of $123,173.00
with the promise that said funds would be utilized to
renovate the kitchen and bathroom, among other things, at
which point the Subject Property would be sold for a profit,
with the loaned funds being returned to Plaintiff Balfour,
with interest.
9. Additionally, Plaintiff Balfour assisted and co-signed a
commercial loan with Defendant Haymon for an additional
Nos. 20AP-323 and 20AP-327 11
$20,000, the proceeds of which were to be used exclusively
for to improve the Subject Property.
10. Defendant Haymon was to repay said loan himself.
11. To date, Defendant Haymon has made no payments on the
loan. Plaintiff Balfour has made all payments due on the loan.
***
14. Recently, Plaintiff Balfour ascertained the $123,173.00 she
loaned to Defendant Haymon and his entities, plus the
$20,000 commercial loan proceeds, had not been utilized to
renovate the Subject Property as promised. Instead, upon
information and belief, Defendant Haymon and his entities
wrongfully converted the funds for their own personal use
while Defendant Haymon was living at the Subject Property.
(Emphasis added.)
{¶ 32} The answer contains the following admissions and denials relative to the
material allegations set forth above:
7. This Defendant admits the allegations contained in
Complaint Paragraph 7 are correct in a general way.
8. This Defendant admits Plaintiff made a loan for purposes
as described, but the amount of the loan and terms and
conditions of it are uncertain.
9. This Defendants denies the allegations contained in
Complaint Paragraph 9 for lack of information.
10. This Defendant denies the allegations contained in
Complaint Paragraph 10 for lack of information.
11. This Defendant denies the allegations in Complaint
Paragraph 11 for lack of information.
14. This Defendant denies the allegations contained in
Complaint Paragraph 14.
(Emphasis added.)
{¶ 33} Appellants argue that the Balfour deed should be construed as a mortgage in
light of Balfour's admission that the property was conveyed in connection with the party's
renovation agreement. We agree.
{¶ 34} A "mortgage" has been defined as "[a] conveyance of title to property that is
given as security for the payment of a debt or the performance of a duty that will become
void upon payment or performance according to the stipulated terms." Black's Law
Nos. 20AP-323 and 20AP-327 12
Dictionary 1001 (9th Ed.2009). An "equitable mortgage" is "[a] transaction that has the
intent but not the form of a mortgage and that a court of equity will treat as a mortgage."
Black's Law Dictionary 1002 (9th Ed.Rev.2009). " 'If a person transfers property by deed
absolute to his creditor as security for a debt with the mutual understanding that such
property will be reconveyed by the creditor on the repayment of the debt, a court of equity
will consider such a deed a mortgage, though an innocent purchaser for value from the
creditor can cut off the equitable rights of the debtor.' " Swanbeck v. Sheaves, 6th Dist. No.
L-85-237, 1986 Ohio App. LEXIS 5819, 8-9 (Mar. 7, 1986), quoting Black's Law Dictionary
483 (5th Ed.Rev.1980). Accordingly, under Ohio law, a deed intended to secure
performance of an obligation may be treated as an equitable mortgage whether or not such
interest is disclosed by the instrument. See Swanbeck. See also Dietl v. Sipka, 185 Ohio
App.3d 218, 2009-Ohio-6225, ¶ 21 (11th Dist.), fn. 3 ("In Swanbeck, the trial court
concluded the parties had an equitable mortgage because appellant had an agreement to
'reconvey the land upon payment of [an] outstanding debt.' ").
{¶ 35} Ohio is a notice-pleading state. Under the notice pleading rules of the Ohio
Rules of Civil Procedure, "[a]ll pleadings shall be so construed as to do substantial justice."
Civ.R. 8(F). A party "is not required to prove his or her case at the pleading stage." York v.
Ohio State Hwy. Patrol, 60 Ohio St.3d 143, 145 (1991). "Very often, the evidence necessary
for a [party] to prevail is not obtained until [that party] is able to discover materials in the
[opposing party's] possession." Id.{¶ 36} Appellants admitted Balfour made a loan to Haymon or his entities for the
specific purposes described in the complaint, but appellants have asserted that "the amount
of the loan and terms and conditions of it are uncertain." (Answer at ¶ 8.) Appellants have
also denied that Balfour provided appellants with $123,173 pursuant to the renovation
contract, denied that Haymon was to repay the loan himself, and denied Balfour's
allegations regarding the commercial loan, for lack of knowledge. No documents
corroborating Balfour's allegations were submitted with the complaint, other than the deeds
in question. Appellants have also denied Haymon used funds provided by Balfour for
purposes other than the agreed upon renovations to the subject real property. In our view,
construing the pleadings in appellants' favor, we find sufficient facts have been pleaded to
create a genuine factual issue whether Fenwick executed the quit-claim deed to Balfour as
Nos. 20AP-323 and 20AP-327 13
security either for appellants' performance of the renovation contract and recoupment of
loan proceeds or repayment of the loan by Haymon. Thus, the pleadings permit an inference
that the parties intended to create an equitable mortgage.
{¶ 37} Appellants asserted the following affirmative defenses in their answer:
laches; waiver; estoppel; failure of a meeting of the minds; unclean hands; and "plaintiff is
the party in breach of contract not defendant." (Emphasis added.) (Answer at 7.) When
construed in appellants' favor, the pleadings permit the inference that the Balfour deed and
renovation agreement obligated Balfour to reconvey the property either to a third-party
purchaser on appellants' completion of the renovation work and recoupment of the loan
proceeds, or to Haymon on repayment of the loan. Appellants have alleged in their answer
that Balfour is the party in breach the agreement, not appellants. (Answer at 7.)
Accordingly, there is a triable issue of fact whether Balfour's breach of the renovation
contract extinguished Balfour's title.4
{¶ 38} The trial court found that the doctrine of estoppel by deed precluded Fenwick
from denying that it conveyed an ownership interest to Balfour. The trial court noted that
"[T]he equitable doctrine of 'estoppel by deed' * * * precludes a party from denying a certain
fact recited in a deed executed by or accepted by him in an action brought upon the
instrument." 37 Robinwood Assoc. v. Health Industries, Inc., 47 Ohio App.3d 156, 158 (10th
Dist.1988), citing 42 Ohio Jurisprudence 3d, Estoppel and Waiver, Section 4, at 10 (1983)
4We disagree with Balfour's contention that appellants waived any argument based upon the existence of an
equitable mortgage by failing to raise the issue in the trial court. In appellants March 3, 2020 memorandum
contra Balfour's motion for judgment on the pleadings, appellants made the following argument:
"Plaintiff herself creates doubt as to the facts. She admits that the Balfour Deed was given to her after she had
made $123,000 in loans to Defendants for use in improving the subject property * * * which allows for an
inference the deed was really a badly drawn mortgage which Plaintiff accepted only as collateral. * * *.
***
* * * Defendants made their own contrary averments of fact to Plaintiffs assertions in their Answer. In Answer
paragraph 12 they pled their disagreement as to what Plaintiff's state of mind was in taking receipt of the
Balfour Deed, i.e., whether she was accepting it as a title conveyance or an amateur mortgage. * * *.
***
On the ejectment count, the Court would first have to determine whether Plaintiff owns the fee simple estate
and as shown above, there is doubt whether Plaintiff received the Balfour deed as a conveyance of title, or as
collateral for loan, also known as a mortgage."
(Mar. 3, 2020 Memo. Contra at 3-4.)
Nos. 20AP-323 and 20AP-327 14
and Cleveland Boat Serv., Inc. v. Cleveland, 102 Ohio App. 255,. 557 (8th Dist.1955),
paragraph two of the syllabus.
{¶ 39} In our view the trial court mistakenly applied the doctrine in favor of Balfour,
as "[i]t is a well-established principle that a mere quitclaim deed, without covenants
of warranty, does not estop the grantor from showing that no title passed by such deed, and
* * * cannot estop the grantee from denying the title of the grantor at the date of the deed."
42 Ohio Jurisprudence 3d, Estoppel and Waiver, Section 11. There is no dispute that
Fenwick conveyed the subject real property to Balfour by quit-claim deed. Moreover, in
light of the questions of fact as to the existence of an equitable mortgage and the breach of
the renovation agreement by Balfour, the pleadings do not permit a declaration as to the
validity of either the Balfour deed or the Bungaplex deed. The interests of justice require
the competing equitable claims be resolved upon the evidence, not on the pleadings.5
b. Ejectment
{¶ 40} As we have found, the pleadings raise a genuine factual issue as to the validity
of the Balfour deed. Consequently, the judgment of ejectment was in error. Moreover, R.C.
5303.08 provides in relevant part:
A person who, without fraud or collusion on his part,
obtained title to and is in the quiet possession of lands or
tenements, claiming to own them, shall not be evicted or
turned out of possession by any person who sets up and
proves an adverse and better title, until the occupying
claimant, or his heirs, is paid the value of lasting
improvements made by the occupying claimant on the land,
or by the person under whom he holds, before the
commencement of suit on the adverse claim by which such
eviction may be effected, unless the occupying claimant
refuses to pay to the party establishing a better title the value
of the lands without such improvements, on demand by him
or his heirs, when such occupying claimant holds:
(A) Under a plain and connected title, in law or equity, derived
from the records of a public office
(Emphasis added.)
5 Balfour argues that the statute of frauds bars appellants from enforcing any mortgage that arose out the
renovation contract and deed. Application of the statute of frauds would be premature in this case as it is an
affirmative defense which must be specifically pleaded. Rogers v. Targot Telemarketing Servs., 70 Ohio
App.3d 689 (10th Dist.1990).
Nos. 20AP-323 and 20AP-327 15
{¶ 41} Haymon is the sole member of Bungaplex. Bungaplex is claiming title to the
subject real property pursuant to the Bungaplex deed filed with the Franklin County
Recorder. In our view, when construed in appellants' favor, as is required in ruling on a
Civ.R. 12(C) motion, the pleadings give rise to a genuine issue of fact whether appellants
have been compensated for the value of any lasting improvements made on the land.
Consequently, the trial court was precluded by R.C. 5303.08 from granting judgment on the
pleadings to Balfour on the ejectment claim.
{¶ 42} For the foregoing reasons, appellants' first and fifth assignments of error are
sustained.
2. Appellants' Second, Third, and Fourth Assignments of Error
{¶ 43} Because appellants' second, third, and fourth assignments of error challenge
the trial court's May 19, 2020 judgment, we shall consider them together. In appellants'
third assignment of error, appellants argue that the trial court erred in not construing the
affirmative defenses asserted in the answer as counterclaims. We agree.
{¶ 44} Civ.R. 8(C) provides:
In pleading to a preceding pleading, a party shall set forth
affirmatively accord and satisfaction, arbitration and award,
assumption of risk, contributory negligence, discharge in
bankruptcy, duress, estoppel, failure of consideration, want of
consideration for a negotiable instrument, fraud, illegality,
injury by fellow servant, laches, license, payment, release, res
judicata, statute of frauds, statute of limitations, waiver, and
any other matter constituting an avoidance or affirmative
defense. When a party has mistakenly designated a defense
as a counterclaim or a counterclaim as a defense, the court,
if justice so requires, shall treat the pleading as if there had
been a proper designation.
(Emphasis added.)
{¶ 45} In Powell v. Vanlandingham, 4th Dist. No. 10CA24, 2011-Ohio-3208, ¶ 23,
the court of appeals explained the difference between affirmative defenses and
counterclaims:
"The difference between a defense and a counterclaim is that
'the latter is affirmative in nature, and asserts a separate cause
of action, while the former serves to preclude recovery by
asserting facts that defeat the plaintiff's right to recovery.'
Riley v. Montgomery (June 30, 1983), Warren App. No. 88,
Nos. 20AP-323 and 20AP-327 16
1983 Ohio App. LEXIS 15944. An affirmative defense
generally refers to that which is offered to defeat an action by
' "denying, justifying, or confessing and avoiding the plaintiff's
cause of action. It goes to the plaintiff's right and generally
would not be considered an independent claim existing
against the plaintiff." ' " BAC Home Loans Servicing, L.P. v.
Hall, Warren App. No. CA2009-10-135, 2010 Ohio 3472, at
¶ 18, quoting Riley, quoting Secrest v. Standard Oil Co.
(1963), 118 Ohio App. 270, 271, 194 N.E.2d 68.
Id. at fn. 2:
{¶ 46} Appellants' answer to the complaint asserts affirmative defenses of waiver,
estoppel, failure of a meeting of the minds, unclean hands, and "plaintiff is the party in
breach of contract not defendant." (Emphasis added.) (Answer at 7.) Haymon's affidavit,
which was filed by appellants on the same day Balfour filed her Civ.R. 41(A)(2) motion
provides in relevant part as follows:
2. I am residing at said real estate. At the moment I am the
only person residing there. The property requires up to
$15,000 in work at a minimum, before it would have a
certificate of occupancy allowing others to be able lawfully to
live there.
***
5. I will explain this further in a longer affidavit but I wish to
inform the Court that the deed I gave to Deborah Balfour was
expressly understood between us to be a security instrument
for the repayment of money to her and was not understood by
either of us to be an absolute deed fully transferring
ownership.
6. Deborah and I had a contract, or partnership, or loan
agreement regarding the property referenced above and a
property at 3104 Twin Circle Street, Moore, Oklahoma 73160.
Deborah was to be the money "partner" and I the "work
partner". Deborah breached the agreement by withholding
the final $15,000 needed to finish the Ohio property and by
maliciously thwarting a sale we had arranged of the
Oklahoma property.
(Emphasis added.)
{¶ 47} Based upon the facts pleaded in the complaint and answer, and the additional
factual averments in Haymon's affidavit, it is evident that appellants have mistakenly
Nos. 20AP-323 and 20AP-327 17
pleaded a breach of contract as an affirmative defense. The same factual allegations
arguably state a claim for monetary relief under R.C. 5303.08, the occupying claimant law.
{¶ 48} Under Civ.R. 8(C), "[w]hen a party has mistakenly designated a defense as a
counterclaim or a counterclaim as a defense, the court, if justice so requires, shall treat the
pleading as if there had been a proper designation." Eaton Corp. v. Taylor-Winfield Corp.,
8th Dist. No. 62361, 1993 Ohio App. LEXIS 3522 ("The claim for quantum meruit is not
barred for failure to set forth a counterclaim, because quantum meruit was mistakenly
pleaded as an affirmative defense [and] Civ.R. 8(C) provides that if a counterclaim is
mistakenly pleaded as an affirmative defense, the court shall treat the pleading as if there
had been a proper designation."); Powell at ¶ 23, fn. 2 (In an encroachment action, defenses
of estoppel, waiver and acquiescence properly treated as a counterclaim to declare the legal
description of a disputed boundary line.); Northwest Ohio Props. Ltd. v. Cty. of Lucas, 6th
Dist. No. L-17-1190, 2018-Ohio-4239, ¶ 25 (In a trespass action, the defense of a de facto
easement was properly treated as a counterclaim to declare the legal description of a
disputed boundary line.). When justice so requires, a trial court shall treat an affirmative
defense as a counterclaim even though the answer does not contain a demand for relief.
Eaton Corp. We believe the interests of justice require such treatment in this case because
appellants counterclaims are compulsory in nature.
{¶ 49} Civ.R. 13(A) identifies compulsory counterclaims as follows:
(A)Compulsory counterclaims.
A pleading shall state as a counterclaim any claim which at the
time of serving the pleading the pleader has against any
opposing party, if it arises out of the transaction or
occurrence that is the subject matter of the opposing party's
claim and does not require for its adjudication the presence of
third parties of whom the court cannot acquire jurisdiction.
(Emphasis added.)
{¶ 50} "To determine whether the claims arise out of the same transaction or
occurrence, the courts apply the 'logical relation' test." Licking Hts. Local School Dist. Bd.
of Edn. v. Reynoldsburg City School Dist. Bd. of Edn., 10th Dist. No. 12AP-579, 2013-Ohio-
3211, ¶ 14, quoting Rettig Ent., Inc. v. Koehle, 68 Ohio St.3d 274 (1994). " 'Under the logical
relation test: "a compulsory counterclaim is one which is logically related to the opposing
Nos. 20AP-323 and 20AP-327 18
party's claim where separate trials on each of their respective claims would involve a
substantial duplication of effort and time by the parties and the courts.' " Licking Hts. at
¶ 14, quoting Rettig at paragraph two of the syllabus. Appellants' counterclaims based on
Balfour's alleged breach of the renovation agreement are logically related to the claims
Balfour asserted against appellants in her complaint and it is evident that separate trials on
each of the respective claims would involve a substantial duplication of effort and time by
the parties and the courts. Accordingly, appellants have asserted compulsory counterclaims.
Smith v. Bank of Am., 7th Dist. No. 11-MA-169, 2013-Ohio-4321, ¶ 40, citing Jarvis v. Wells
Fargo Bank, 7th Dist. No. 09 CO 6, 2010-Ohio-3283, ¶ 32.
{¶ 51} As a general rule "[i]f a party fails to file a compulsory counterclaim, he has
waived his right to thereafter assert that claim." Lenihan v. Shumaker, 9th Dist. No. 12814,
1987 Ohio App. LEXIS 6693 (May 6, 1987), citing Broadway Mgt., Inc. v. Godale, 55 Ohio
App.2d 49 (9th Dist.1977). Thus, the trial court's failure to treat appellants' affirmative
defense as counterclaims unfairly prejudiced appellants' right of recovery in this action or a
subsequent action. Smith at ¶ 40 (Mortgagor's counterclaims against mortgagee barred by
res judicata in subsequent litigation where mortgagor failed to assert them in the
foreclosure action.).
{¶ 52} Balfour nevertheless argues appellants waived the Civ.R. 8(C) argument by
failing to move the trial court for such a ruling. Our reading of Civ.R. 8(C) belies Balfour's
argument, as the rule states the trial court shall treat mistakenly designated defenses as a
counterclaim if justice so requires. A motion is not required to invoke the rule. The
mandatory language of Civ.R. 8(C) is consistent with the language of Civ.R. 8(F) which
requires that "[a]ll pleadings shall be so construed as to do substantial justice."
{¶ 53} Moreover, as appellants' have argued in their fourth assignment of error, the
trial court violated due process when it granted appellee's Civ.R. 41(A)(2) motion to dismiss,
without providing appellants the required notice and opportunity to be heard in opposition
to the motion. In Citibank, N.A. v. Slorp, 10th Dist. No. 13AP-513, 2013-Ohio-5331, this
court set out the applicable rule of law as follows:
In Logsdon v. Nichols, 72 Ohio St. 3d 124, 126, 1995 Ohio 225,
647 N.E.2d 1361 (1995), the Supreme Court of Ohio stated
that, "[g]iven the need for trial court action in order to effect
the dismissal under Civ.R. 41(A)(2), the opposing party to the
action is entitled to be heard on the motion. Failure to afford
Nos. 20AP-323 and 20AP-327 19
that opportunity can be reversible error." Furthermore, in
Cuervo v. Snell, 10th Dist. No. 99AP-1442, 2000 Ohio App.
LEXIS 4404 (Sept. 26, 2000), we held that " '[h]owever
hurried a court may be in its efforts to reach the merits of a
controversy, the integrity of procedural rules is dependent
upon consistent enforcement because the only fair and
reasonable alternative thereto is complete abandonment.' "
Id., quoting Miller v. Lint, 62 Ohio St.2d 209, 215, 404 N.E.2d
752 (1980). "[I]f a trial court disregards the response time
created by the Ohio Rules of Civil Procedure, that court has
committed reversible error." Id., citing Gibson-Myers &
Assoc. v. Pearce, 9th Dist. No. 19358, 1999 Ohio App. LEXIS
5010 (Oct. 27, 1999), following In re Foreclosure of Liens for
Delinquent Taxes, 79 Ohio App.3d 766, 771-72, 607 N.E.2d
1160 (2d Dist.1992).
Id. at ¶ 8.
{¶ 54} In Chafin v. Ohio Adult Parole Auth., 10th Dist. No. 13AP-646, 2014-Ohio-
1192, this court noted that "Franklin County, Ohio, Ct. C.P.R. 21.01 requires that answers to
motions be filed on or before the fourteenth day after the date of service as set forth on the
certificate of service attached to the motion." Id. at ¶ 9, citing Slorp.
{¶ 55} Here, the trial court granted appellee's Civ.R. 41(A)(2) motion just one day
after it was filed. Civ.R. 41(A)(2) reads as follows:
Except as provided in division (A)(1) of this rule, a claim shall
not be dismissed at the plaintiff's instance except upon order
of the court and upon such terms and conditions as the court
deems proper. If a counterclaim has been pleaded by a
defendant prior to the service upon that defendant of the
plaintiff's motion to dismiss, a claim shall not be dismissed
against the defendant's objection unless the counterclaim can
remain pending for independent adjudication by the court.
Unless otherwise specified in the order, a dismissal under
division (A)(2) of this rule is without prejudice.
(Emphasis added.)
{¶ 56} Appellants' compulsory counterclaims cannot remain pending for
independent adjudication by the court. Smith at ¶ 40, citing Jarvis at ¶ 32. Because the
trial court disregarded the response time provided by the rules, appellants did not have the
opportunity to object to the dismissal on grounds that their answer contained a
counterclaim, as they have in this appeal. The record compels the conclusion that trial court
committed reversible error in granting the motion to dismiss.
Nos. 20AP-323 and 20AP-327 20
{¶ 57} For the foregoing reasons, we sustain appellants' third and fourth
assignments of error. Having sustained appellants' third and fourth assignments of error,
we need not address appellants' second assignment of error claiming the trial court erred in
granting Balfour's Civ.R. 41(A)(2) motion to dismiss fewer than all of her claims. Appellants'
second assignment of error is moot. App.R. 12(A)(1)(c).
V. CONCLUSION
{¶ 58} Having sustained appellants' first, third, fourth, and fifth assignments of
error, and having found appellants' second assignment of error moot, we reverse the
judgments of the trial court and remand the matter to the trial court for further proceedings
consistent with this decision.
Judgments reversed and remanded; motion to
strike granted, in part.
KLATT, J., concurs in part and concurs in judgment.
SADLER, J., concurs in part and dissents in part.
Nos. 20AP-323 and 20AP-327 21
KLATT, J., concurring in part and concurring in judgement.
{¶ 59} I agree with the majority's conclusion that the trial court erred when it
granted Balfour's Civ.R. 12(C) motion and entered an order of ejectment. I write separately
to express a more narrow legal analysis.6
{¶ 60} The majority decision accurately sets forth the Civ.R. 12(C) standard and our
de novo standard of review. I see no need to restate the Civ.R. 12(C) standard here. Balfour's
Civ.R. 12(C) motion seeks a declaration that her title to the subject property is superior to
that asserted by Bungaplex as a matter of law. However, the pleadings do not conclusively
establish that Balfour is entitled to such a declaration as a matter of law.
{¶ 61} The pleadings do establish that Haymon, on behalf of Fenwick, executed and
gave to Balfour a quit-claim deed to the subject property. However, the pleadings and
attachments thereto do not conclusively establish what the parties intended when Balfour
received the deed. In paragraph seven of her complaint, without indicating any specific
timeframe, Balfour alleged that she is a friend of Haymon, and that she "agreed to loan
monies for Defendant Haymon and/or his entities to use to renovate the Subject Property."
In paragraph eight of her complaint, Balfour alleged she "loaned Defendant Haymon and/or
his entities additional sums for a total of $123,173.00 with the promise that said funds would
be utilized to renovate the kitchen and bathroom, among other things, at which point the
Subject Property would be sold for a profit, with the loaned funds being returned to plaintiff
Balfour, with interest." Balfour alleged Haymon was to repay the loan himself. (July 19,
2019 Compl. at ¶ 10.) Balfour also alleged "[t]o date, Defendant Haymon has made no
payments on the loan. Plaintiff Balfour has made all payments due on the loan." Id. at ¶ 11.
Based solely on her receipt of the quit-claim deed from Fenwick in connection with these
loans, Balfour contends that Fenwick no longer had any legal interest in the subject
property, and therefore Fenwick could not transfer any title to Bungaplex. Id. at ¶ 12, 13,
and 17.
{¶ 62} Appellants expressly denied that Fenwick no longer had any right, title, or
interest in the subject property when it conveyed the property to Bungaplex. ( Nov. 21, 2019
Answer at ¶ 17.) Appellants also expressly denied Balfour's allegation in paragraph 23 of her
6 I also agree with the majority that appellants have standing to bring this appeal.
Nos. 20AP-323 and 20AP-327 22
complaint that "Balfour has a full fee simple absolute interest in the subject property and is
entitled to possession and ownership thereof." These denials coupled with Balfour's
allegations that she loaned Haymon money for the purpose of renovating the property raise
an issue regarding the intention of the parties at the time Balfour received the quit-claim
deed. Drawing all reasonable inferences in appellants' favor as the nonmoving party, as we
must under Civ.R. 12(C), I construe appellants' answer as contesting Balfour's legal title to
the property and alleging that Balfour's receipt of the quit-claim deed was intended to secure
the Balfour loans, not to immediately convey legal title to the property. Therefore,
appellants' answer suggests that Fenwick retained legal title to the property and could
subsequently convey the property to Bungaplex. This is precisely the argument appellants
made in opposing Balfour's motion for judgment on the pleadings.
{¶ 63} Under Ohio law, "in order for a deed to be operative as a transfer of ownership
of land or an interest or any estate therein, there must be a delivery of the instrument. It is
the delivery that gives the instrument force and effect. Delivery imports transfer of
possession or the right to possession of the instrument with the intent to pass title as a
present transfer. It is essential to delivery that there not only be a voluntary delivery, but
there must be also an acceptance thereof on the part of the grantee, with the mutual
intention of the parties to pass title to the property described in the deed." (Emphasis
added.) Kniebbe v. Wade, 161 Ohio St. 294, 297 (1954); Welsh v. Estate of Cavin, 10th Dist.
No. 02AP-1328, 2004-Ohio-62, ¶ 22-23 (execution and delivery of quit-claim deed require
mutual intent to convey the property to effectuate a transfer of title); Candlewood Lake
Assn. v. Scott, 10th Dist. No. 01AP-631 (Dec. 27, 2001) ("[a]n effective delivery, however,
also requires an acceptance on the part of the grantee, coupled with the mutual intent of the
parties to pass title to the property described in the deed." Citing Kniebbe.
{¶ 64} Here, the pleadings do not establish that the Balfour deed was delivered "with
the mutual intent of the parties to pass title to the property described in the deed."
Therefore, the trial court erred in granting Balfour's motion for judgment on the pleadings
declaring that Balfour has the superior legal interest in the property.
{¶ 65} Nor do the pleadings establish as a matter of law that the doctrine of estoppel
by deed precludes Fenwick from alleging that it possessed legal title when it conveyed the
property to Bungaplex. As noted in the majority decision, it is well-established that a mere
Nos. 20AP-323 and 20AP-327 23
quit-claim deed, without conveyance of warranty, does not estop the grantor from showing
that no title passed by such deed. 42 Ohio Jurisprudence 3d, Estoppel and Waiver, Section
11 (1983). A grantor of a quit-claim deed may contest the validity of the delivery by arguing
that the parties did not intend to pass title to the property described in the deed. Welsh
(summary judgment reversed because evidence presented in opposition to summary
judgment raised a material issue of fact regarding the intent of the parties in executing the
quit-claim deeds).
{¶ 66} When the issue is whether receipt of a quit-claim deed constitutes a present
conveyance of property, applying the principle of estoppel by deed would conflict with the
requirement that effective delivery of a deed requires a voluntary delivery, acceptance
thereof on the part of the grantee, with the mutual intention of the parties to pass title to the
property described in the deed. Kniebbe; Welsh. Here, the pleadings do not establish as a
matter of law the application of the doctrine of estoppel by deed.
{¶ 67} Because the trial court erred in granting Balfour's motion for judgment on
the pleadings declaring that Balfour has the superior legal interest in the property, the trial
court's judgment on the ejectment claim is also in error. Until it is determined who has the
superior legal interest in the subject property, Balfour cannot establish she is entitled to
relief under R.C. 5303.03.
{¶ 68} I also agree that the trial court erred in granting Balfour's Civ.R. 41(A)(2)
motion to dismiss her remaining claims without giving appellants an opportunity to
respond. Citibank, N.A. v. Slorp, 10th Dist. No. 13AP-513, 2013-Ohio-5331, ¶ 8 (" 'given the
need for trial court action in order to effect the dismissal under Civ.R. 41(A)(2), the opposing
party to the action is entitled to be heard on the motion. Failure to afford that opportunity
can be reversible error' "), quoting Logsdon v. Nichols, 72 Ohio St.3d 124, 126 (1995).
{¶ 69} Appellants have argued that they were prejudiced by the trial court's failure
to give them an opportunity to respond to Balfour's Civ.R. 41(A)(2) motion. According to
appellants, this failure denied them the opportunity to argue that their answer contained a
mislabeled counterclaim for breach of contract, as they have argued on appeal. Without
agreeing or disagreeing with appellants' contention that their answer contains a mislabeled
counterclaim, I nevertheless agree with the majority that the trial court erred by granting
Balfour's Civ.R. 41(A)(2) motion without giving appellants the opportunity to respond.
Nos. 20AP-323 and 20AP-327 24
SADLER, J., concurring in part and dissenting in part.
{¶ 70} I respectfully dissent from the majority's conclusion that Fenwick Associates,
LLC, and Bungaplex, LLC, are parties to this consolidated appeal. Notwithstanding that
disagreement, I agree with the majority that Haymon has standing to appeal the declaratory
judgment ruling and that the trial court's judgments must be reversed and remanded.
Because I would join Judge Klatt's more narrow legal analysis for the reasons set forth
below, I concur with the concurring decision on the first and fifth assignments of error,
concur with the majority's resolution of the second and fourth assignments of error, and
dissent on the third assignment of error.
A. Whether Fenwick and Bungaplex are parties to the appeal
{¶ 71} The majority concludes that the term "et al." in the caption of the notices of
appeal filed by Haymon was sufficient to identify Fenwick and Bungaplex as parties
appealing from the trial court judgments. I respectfully disagree.
Under App.R. 3(D), "the notice of appeal shall specify the party or parties taking the
appeal." Citing Transamerica Ins. Co. v. Nolan, 72 Ohio St.3d 320 (1995) and Grand
Council of Ohio v. Owens, 86 Ohio App.3d 215 (1993), the majority correctly notes that the
Supreme Court of Ohio and this court have held that use of the term "et al." in a notice of
appeal does not deprive an appellate court of jurisdiction over an appeal by a party not
specifically named in the notice of appeal. The majority's analysis, however, disregards a
key difference between those cases and the present appeal.
{¶ 72} The notice of appeal from the trial court judgment in Transamerica
designated the appealing parties as "Dennis Wallace et al." Transamerica at 321. The court
of appeals held that it lacked jurisdiction to consider Linda Wallace's appeal because the
term "et al." was insufficient to designate unnamed plaintiffs as appealing parties under
App.R. 3. See Transamerica Ins. Co. v. Nolan, 12th Dist. No. CA93-04-035 (Nov. 22, 1993).
The Supreme Court of Ohio reversed, finding that the "Dennis Wallace et al." designation
was sufficient to apprise the parties of Linda Wallace's interest in the appeal. Transamerica,
72 Ohio St.3d 320 at 321-23. Therefore, the Supreme Court concluded, the court of appeals
abused its discretion by failing to consider Linda Wallace's appeal. Id. at 322-23. This court
previously reached the same conclusion in Grand Council, holding that designating the
appellants as "The Grand Council of Ohio, The Order of United Commercial Travelers of
Nos. 20AP-323 and 20AP-327 25
America, et al." did not deprive the court of jurisdiction over the appeal of any of the other
plaintiffs in that case. Grand Council of Ohio at 218-19.
{¶ 73} In both Transamerica and Grand Council, the use of "et al." to identify the
parties appealing the trial court's decision was contained in both the caption and the body
of the notice of appeal. See Transamerica, 72 Ohio St.3d 320 at 321 ("The notice of appeal
filed in the court of appeals designated the appellants as 'Dennis Wallace et al.' "); Grand
Council at 218 ("[T]he original notice of appeal * * * stated in pertinent part that '[n]otice is
hereby given that The Grand Council of Ohio, The Order of United Commercial Travelers of
America, et al. (the 'plaintiffs' herein), hereby appeal * * *.' "). By contrast, in the present
case the term "et al." was used only in the caption of the notices of appeal. The body of each
notice of appeal expressly states "Joseph Virgil Haymon, Defendant in the above-captioned
case, respectfully gives Notice that he hereby appeals * * *." (Emphasis added.) (June 15,
2020 Notice of Appeal; June 18, 2020 Notice of Appeal.) The notices of appeal also refer to
Haymon's counsel as "Attorney for Defendant Joseph Virgil Haymon," with no mention of
either Fenwick or Bungaplex. (June 15, 2020 Notice of Appeal; June 18, 2020 Notice of
Appeal.) Under similar circumstances, the First District Court of Appeals concluded in a
recent decision that the use of "et al." in the caption of a notice of appeal was insufficient to
designate a corporate entity as an appellant:
Here, there is no defect on the face of the notice of the appeal.
The caption of the notice of appeal states: "Torbeck Industries,
et al" plaintiffs. The body of the notice of appeal, however,
designates only Richard Torbeck as the appellant and does not
use the term "et al.," as did the notices of appeal in
Transamerica and Grand Council. The notice of appeal also
lists counsel as attorneys for the appellant (singular). Because
Torbeck Industries is not designated as an appellant in the
notice of appeal, it is not a party to this appeal.
Torbeck v. Indus. Mfg. Co., 1st Dist. No. C-140533, 2015-Ohio-3041, ¶ 15.
I agree with the First District's reasoning that the use of "et al." in the caption of a notice of
appeal is insufficient to designate an individual or entity not named in the body of the notice
of appeal as a party to the notice of appeal.
{¶ 74} The majority also notes that Haymon is the sole member of both Fenwick and
Bungaplex, and therefore may act on behalf of those entities. The majority further finds no
prejudice to Balfour by treating Fenwick and Bungaplex as appellants because the parties
Nos. 20AP-323 and 20AP-327 26
stipulated in the trial court that Haymon's answer to the complaint also served as the answer
for Fenwick and Bungaplex. "A corporation is a distinct legal entity, separate and apart from
the natural individuals who formed it." Nu-Trend Homes v. Law Offices of DeLibera, Lyons
& Bibbo, 10th Dist. No. 01AP-1137, 2003-Ohio-1633, ¶ 38. This court has expressly held
that "[a] corporation is a separate legal entity from its shareholders, even where there is but
one shareholder." (Emphasis added.) Koch v. Lind, 121 Ohio App.3d 43, 49 (10th
Dist.1997), quoting LeRoux's Billyle Supper Club v. Ma, 77 Ohio App.3d 417, 420 (6th
Dist.1991). Moreover, the fact that there was a question at the trial level whether Haymon's
answer to the complaint also covered Fenwick and Bungaplex should have put Haymon and
his counsel on notice that the corporate entities were distinct actors in the proceedings.
{¶ 75} Because the notices of appeal in this case only designate Haymon as the
appealing party, I would not find that Fenwick and Bungaplex are parties to this appeal and,
accordingly, I dissent from this portion of the majority decision.
B. Whether Haymon has standing to appeal the declaratory judgment ruling
{¶ 76} Despite concluding that Fenwick and Bungaplex are not parties to this
appeal, I agree with the majority's conclusion that, under the circumstances of this case,
Haymon has standing to appeal the trial court's decision on Balfour's declaratory judgment
claim.
{¶ 77} Balfour's complaint alleged that Fenwick acquired title to the property on or
about September 12, 2014, pursuant to a quit-claim deed. Fenwick then issued a quit-claim
deed on or about April 26, 2017, conveying the property to Balfour. Fenwick subsequently
issued a quit-claim deed conveying the property to Bungaplex on or about August 29, 2017.
There is no assertion that Haymon ever held title to the property in his individual capacity.
In her declaratory judgment claim, Balfour requested that the trial court declare her deed to
be valid and Bungaplex's deed to be invalid. The trial court granted Balfour's motion for
judgment on the pleadings as to her declaratory judgment claim, ruling that her deed was
valid and Bungaplex's deed was invalid. Balfour asserts that Haymon lacks standing to
appeal the declaratory judgment ruling because he does not have an individual ownership
interest in the subject property.
{¶ 78} "Under the common law, it is well settled that the right to appeal can be
exercised only by those parties who are able to demonstrate a present interest in the subject
Nos. 20AP-323 and 20AP-327 27
matter of the litigation which has been prejudiced by the judgment of the lower court."
Willoughby Hills v. C.C. Bar's Sahara, 64 Ohio St.3d 24, 26 (1992). " 'Appeal lies only on
behalf of a party aggrieved by the final order appealed from.' " Id., quoting Ohio Contract
Carriers Assn., Inc. v. Pub. Util. Comm., 140 Ohio St. 160 (1942), syllabus. "The appellant
must show that its rights have been adversely affected by the trial court's judgment in order
for him to be an aggrieved party and for an appeal to lie." Tschantz v. Ferguson, 49 Ohio
App.3d 9, 13 (10th Dist.1989).
{¶ 79} "Generally, a party does not have standing to prosecute an appeal to protect
the rights of a third party." Wells Fargo Bank, N.A. v. Kessler, 10th Dist. No. 15AP-216,
2015-Ohio-5085, ¶ 23. Haymon does not have an individual ownership interest in the
subject property and was not a party to the Balfour Deed or the Bungaplex Deed in his
individual capacity. Haymon is the sole member of Fenwick and Bungaplex but, as
explained above, those are separate legal entities. Koch, 121 Ohio App.3d 43 at 49. Thus, as
an individual, Haymon lacks a "present interest" in the Bungaplex Deed that has been
prejudiced by the declaratory judgment ruling. However, under the circumstances in this
case, our analysis cannot end there.
{¶ 80} Balfour's declaratory judgment claim was coupled with an ejectment claim.
Ejectment requires a plaintiff to establish "that he has a legal estate [in real property] and is
entitled to the possession thereof, describing it with such certainty as to identify the
property, and that the defendant unlawfully keeps him out of the possession." R.C. 5303.03;
see also Liberty Self-Stor, Ltd. v. Porter, 2d Dist. No. 21699, 2007-Ohio-1510, ¶ 20
("Ejectment is the proper remedy against one wrongfully in possession of real property.
Ejectment is available where the plaintiff has a legal title and is entitled to the possession of
the real property but is unlawfully kept out of the possession by the defendant."). Haymon
admitted in his answer that he resided at the property. Therefore, the key question before
the trial court was whether Balfour had legal title and was entitled to possession of the
subject property. In granting Balfour's ejectment claim, the trial court relied on its
declaratory judgment ruling:
As shown in the declaratory judgment analysis, Plaintiff
Balfour has a legal estate in the real property and a possessory
right through the Balfour Deed. The identity of the real
property has been established with certainty in the Balfour
Deed and Plaintiff's Complaint which provided the Subject
Nos. 20AP-323 and 20AP-327 28
Property's physical address and Franklin County Permanent
Parcel Number. Defendants have kept Plaintiff Balfour from
possessing the real property by Defendant Haymon residing at
the Subject Property when he has no legal right to do so. Thus,
the statutory requirements have been satisfied and Plaintiff
Balfour is entitled to judgment on the pleadings.
(Emphasis added.) (Mar. 16, 2020 Decision & Entry at 6.)
Balfour does not challenge Haymon's standing to appeal the trial court's ruling on her
ejectment claim.
{¶ 81} Under these circumstances, where the trial court's ruling on the ejectment
claim and Haymon's right to occupy the subject property necessarily flowed from its ruling
on the declaratory judgment claim, Haymon was an "aggrieved party" whose rights were
adversely affected by the declaratory judgment ruling. See Tschantz, 49 Ohio App.3d 9 at
13. Therefore, Haymon has standing to appeal the trial court judgment on the declaratory
judgment claim.
C. Whether Balfour was entitled to judgment on the pleadings
{¶ 82} In his first and fifth assignments of error, Haymon challenges the trial court's
judgment granting Balfour's motion for judgment on her declaratory judgment and
ejectment claims. "A motion for judgment on the pleadings is to be granted when, after
viewing the allegations and reasonable inferences therefrom in the light most favorable to
the nonmoving party, the moving party is entitled to judgment as a matter of law."
Kamnikar v. Florita, 10th Dist. No. 16AP-736, 2017-Ohio-5605, ¶ 35. As Judge Klatt's
concurrence explains, the pleadings in this case do not conclusively establish that Balfour
was entitled to declaratory judgment or relief on her ejectment claim under R.C. 5303.03 as
a matter of law. Accordingly, I would sustain Haymon's first and fifth assignments of error.
However, because I believe the narrow analysis presented in Judge Klatt's concurrence is
the proper course, I differ with the reasoning of the lead opinion on these assignments of
error and respectfully concur with the reasoning set forth in the concurring opinion.
D. Whether the trial court erred by granting Balfour's motion to dismiss her
remaining claims
{¶ 83} In his fourth assignment of error, Haymon asserts the trial court erred by
summarily granting Balfour's motion to dismiss without giving him an opportunity to
respond. After the trial court granted her motion for judgment on the pleadings on the
Nos. 20AP-323 and 20AP-327 29
declaratory judgment and ejectment claims, Balfour moved to dismiss the remainder of her
claims under Civ.R. 41(A)(2). That rule states that, except as provided in Civ.R. (A)(1), "a
claim shall not be dismissed at the plaintiff's instance except upon order of the court and
upon such terms and conditions as the court deems proper." The Supreme Court of Ohio
has held that "[g]iven the need for trial court action in order to effect [a] dismissal under
Civ.R. 41(A)(2), the opposing party to the action is entitled to be heard on the motion.
Failure to afford that opportunity can be reversible error." Logsdon v. Nichols, 72 Ohio
St.3d 124, 127 (1995). In this case, Balfour filed her motion to dismiss on May 18, 2020.
The trial court granted the motion the following day. Because Haymon was not afforded an
opportunity to respond to Balfour's motion, I would sustain Haymon's fourth assignment of
error. Having sustained Haymon's fourth assignment of error, I would find his second and
third assignments of error to be moot. The majority finds the second assignment of error
moot but reaches the merits of Haymon's third assignment of error. Therefore, I concur
with the majority as to the second and fourth assignments of error but dissent as to the third
assignment of error, because I deem it moot.
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