U.S. Bank, N.A. v. Smith

[Cite as U.S. Bank, N.A. v. Smith, 2018-Ohio-3770.]
IN THE COURT OF APPEALS OF OHIO
SEVENTH APPELLATE DISTRICT
MAHONING COUNTY
U.S. BANK, NATIONAL ASSOCIATION,
Plaintiff-Appellee,
v.
RONALD J. SMITH, et al.,
Defendants-Appellants.
OPINION AND JUDGMENT ENTRY
Case No. 17 MA 0093
Motion for Reconsideration
BEFORE:
Cheryl L. Waite, Gene Donofrio, Carol Ann Robb, Judges.
JUDGMENT:
Overruled.
Atty. David A. Wallace and
Atty. Karen M. Cadieux, Carpenter, Lipps & Leland LLP, 280 Plaza, Suite 1300, 280
North High Street, Columbus, Ohio 43215
Atty. Matthew J. Richardson, Manley, Deas, Kochalski LLC, P.O. Box 165028,
Columbus, Ohio 43216-5028, for Plaintiff-Appellee
Ronald J. and Nancy L. Smith, Pro se Appellants, 1625 Gully Top Lane, Canfield, Ohio
44406.
Dated: September 13, 2018
PER CURIAM.
–2–
{¶1} On July 6, 2018, Pro se Defendants-Appellants Ronald J. and Nancy L.
Smith filed an application for reconsideration of our June 21, 2018 decision in U.S.
Bank, National Association v. Smith, 7th Dist. No. 17 MA 0093, 2018-Ohio-2489 (“Smith
III”). Plaintiff-Appellee, U.S. Bank, N.A. filed an opposition brief to the application for
reconsideration on July 13, 2018. Appellants’ reply was filed on July 20, 2018.
{¶2} In Smith III, we affirmed two decisions of the Mahoning County Court of
Common Pleas: a May 10, 2017 judgment entry, summarily overruling Appellants’
motion to vacate summary judgment based on fraud as to a decree in foreclosure
(“foreclosure order”) which had been entered January 12, 2007 (“Civ.R. 60(B)(5) entry”);
and an April 19, 2017 judgment entry, which summarily overruled Appellants’ motion to
vacate the foreclosure order because it was allegedly a dormant judgment as that term
is defined by Ohio law. (“Dormant judgment entry.”)
{¶3} App.R. 26, which provides for the filing of an application for
reconsideration in this Court, includes no guidelines to be used in the determination of
whether a decision is to be reconsidered. Deutsche Bank Natl. Trust Co. v. Knox, 7th
Dist. No. 09-BE-4, 2011-Ohio-421, ¶ 2, citing Matthews v. Matthews, 5 Ohio App. 3d
140, 143, 450 N.E.2d 278 (10th Dist.1981). The test generally applied is whether the
motion for reconsideration calls to the attention of the court an obvious error in its
decision or raises an issue for our consideration that was either not considered or not
fully considered in the appeal. Id.
{¶4} An application for reconsideration is not designed for use in instances
where a party simply disagrees with the conclusions reached and the logic used by an
appellate court. Duetsche Bank at ¶ 2, citing State v. Owens, 112 Ohio App. 3d 334,
Case No. 17 MA 0093
–3–
336, 678 N.E.2d 956 (11th Dist.1996). Rather, App.R. 26 provides a mechanism to
prevent the possible miscarriage of justice that may arise where an appellate court
makes an obvious error or renders an unsupportable decision under the law. Id.
{¶5} In their opening statement, and consistently throughout their application,
Appellants contend that we violated our own precedent in their case because they
contend the decision was based on arguments raised by U.S. Bank for the first time on
appeal. This assertion is directed to our analysis of the dormant judgment entry, as
U.S. Bank did not file an opposition brief prior to the trial court’s dismissal of Appellants’
Civ.R. 60(B)(5) motion.
{¶6} Appellants are nominally correct. Typically, we do not consider arguments
raised for the first time on appeal, Estate of Hohler v. Hohler, 7th Dist. No. 10 CA 870,
197 Ohio App. 3d 237, 2011-Ohio-5469, 967 N.E.2d 219, ¶ 18, citing Litva v. Richmond,
172 Ohio App. 3d 349, 2007-Ohio-3499, 874 N.E.2d 1243, at ¶ 18. However, we do
conduct a thorough analysis of all caselaw that may be relevant on appeal, whether or
not it was cited in a parties’ brief. For instance, in Blackstone v. Moore, 7th Dist. No. 14
MO 0001, 2017-Ohio-8159, the Blackstones argued in their motion for reconsideration
that our reliance on cases not cited in the briefs was inappropriate. We explained that
“an appellate court is expected to conduct its own independent research and is not
limited to consideration of only those cases cited by the parties.” Id. at ¶ 11. This is
true even if the cases are cited for the first time on appeal. Accordingly, there was no
procedural error in our underlying decision when we conducted our own research and
relied on cases that were not cited in the trial court.
{¶7} Ironically, in their reconsideration motion, Appellants actually do raise a
new legal argument for the first time. Appellants argue that their case is analogous to
Case No. 17 MA 0093
–4–
F.D.I.C. v. Graham, 2011 WL 1429218 (S.D.Ohio 2011). In that federal case, the
Southern District of Ohio held that the terms of the parties’ pooling and servicing
agreement vested the servicer, rather than the trustee, with the power to bring the
foreclosure action. Hence, the Graham Court concluded that the trustee was not the
real party in interest. Importantly, the Southern District of Ohio distinguished the
particular facts in Graham from the typical foreclosure action, explaining that “the
Servicer’s substantive right to bring the foreclosure action has been created by a
contract governed by basic contract law and not by Ohio foreclosure law.” Id. at *5.
{¶8} The specific terms of the pooling and servicing agreement in this case,
which Appellants have failed to identify in the record, were neither raised nor addressed
below. This argument is raised by them for the first time in the court of appeals in this
reconsideration request. Consequently, it could not have been properly raised or
considered in the trial court or in their underlying appeal and is not properly before this
Court now.
{¶9} We underscore, nonetheless, that as Appellants conceded in their Civ.R.
60(B) motion and as we explained in LaSalle Bank Natl. Assn. v. Smith, 7th Dist. No. 13
MA 148, 2015-Ohio-5597, ¶ 1, they are procedurally barred from asserting LaSalle
Bank, N.A.’s (“LaSalle”) lack of standing in a collateral action. In Bank of Am., N.A. v.
Kuchta, 141 Ohio St. 3d 75, 2014-Ohio-4275, the Ohio Supreme Court held that a
party's lack of standing can be challenged in the course of the foreclosure proceedings
themselves [e.g. Graham, supra.] or on a direct appeal of that judgment, but that res
judicata bars a party from raising an issue regarding lack of standing in a collateral
attack on a final judgment in foreclosure. Kuchta at paragraph two of the syllabus, ¶ 8,
23-25.
Case No. 17 MA 0093
–5–
{¶10} Further, while “standing is required in order to invoke the jurisdiction of the
court over a particular action in foreclosure, lack of standing does not affect the subject-
matter jurisdiction of a court of common pleas.” Kuchta at ¶ 25. “[A] court of common
pleas that has subject-matter jurisdiction over an action does not lose that jurisdiction
merely because a party to the action lacks standing.” Id. at ¶ 17. Appellants did not file
a direct appeal from the foreclosure order and they may not collaterally attack the
foreclosure order on the basis of LaSalle’s standing. As a consequence, their reliance
on Graham, supra., is unwarranted.
{¶11} Turning to the other issues raised in the application for reconsideration,
Appellants’ Civ.R. 60(B) motion was based solely on the allegation that U.S. Bank
perpetrated a fraud on the court when it misrepresented itself as the real party in
interest in this case. As previously stated, Appellants actually conceded in their motion
to vacate that they were foreclosed from challenging the standing of the original plaintiff
pursuant to Kuchta, supra. (4/26/17 Motion, p. 12.)
{¶12} Appellants contend that we erred in concluding that U.S. Bank has never
represented itself as the real party in interest, but instead, has merely presented as a
trustee acting on behalf of the trust. Appellants argue that there is no “evidentiary-
quality material” in the record to support our conclusion.
{¶13} First, Appellants challenge our reliance on correspondence that they
themselves attached to their Civ.R. 60(B) motion. The correspondence plainly reveals
that U.S. Bank did not misrepresent their role in these legal proceedings. In fact, later in
the motion for reconsideration, Appellants concede that U.S. Bank’s role in this case is
as the trustee. Despite their admission in the motion to vacate that they cannot
collaterally attack the foreclosure order based on standing, Appellants state that the
Case No. 17 MA 0093
–6–
“real party in interest” has never been determined in this case, based on Graham,
supra.
{¶14} The only issue that was properly before us on appeal of the dismissal of
their 60(B) action was the allegation of fraud asserted against U.S. Bank. Because
Appellants did not identify any evidence in the record demonstrating that U.S. Bank
misrepresented its status in this case, their application for reconsideration of our
decision regarding the Civ.R. 60(B)(5) dismissal has no basis.
{¶15} With respect to our determination of the trial court’s decision regarding the
dormant judgment entry, Appellants contend that we have misinterpreted the statute
and caselaw applicable to dormant judgments cited in our Opinion. In particular,
Appellants disagree with our reliance on Moore v. Ogden, 35 Ohio St. 430 (1880).
Appellants attempt to distinguish the facts in Moore, because while a foreclosure decree
existed in that case, it appeared that the order of sale had not yet been entered.
Appellants argue that “[t]here is nothing in the record to suggest there had ever been an
‘order of sale’, nor a judgment explicitly issued by the Court to direct the Sheriff to sell
the property since Mr. Ogden was requesting the Court to issue both execution tools for
the first time.” (7/6/18 Motion for Reconsideration, p. 16.) Hence, Appellants argue that
the matter was still in its preliminary stages when the request to declare it dormant was
attempted.
{¶16} However, the Supreme Court in Moore did not base its holding on the
specific pleading before the court, but, instead, on the general nature of a foreclosure
action. The Court opined that “[t]he judgment or decree did not become dormant,
though five years elapsed without issuing an order of sale. As between the parties the
case was still pending.” Id. at 432, citing Beaumont v. Renick, 24 Ohio St. 445 (1873).
Case No. 17 MA 0093
–7–
This rationale applies with equal force here. It makes no difference that Appellants’
foreclosure has reached a more advanced stage. Until a final order is reached in the
matter it is still an open, pending action.
{¶17} Appellants also argue that we erred in concluding that the filing of an alias
praecipe initiates “a proceeding in aid of execution.” R.C. 2329.07. While Appellants
very clearly disagree with our logic and conclusions, again, an application for
reconsideration cannot be based simply on disagreement with our logic and
conclusions. Duetsche Bank at ¶ 2, citing State v. Owens, 112 Ohio App. 3d 334, 336,
678 N.E.2d 956 (11th Dist.1996).
{¶18} Appellants rely on hyperbole (“appalling and frightening,” “extremely
dangerous,” “horrible”) and an argument based on Graham, supra, that is procedurally
barred on collateral review, by Appellants’ own admission. This application neither
reveals an error in our underlying Opinion nor raises an argument that was not fully
considered. Accordingly, Appellants’ application is overruled.
JUDGE CHERYL L. WAITE
JUDGE GENE DONOFRIO
JUDGE CAROL ANN ROBB
NOTICE TO COUNSEL
This document constitutes a final judgment entry.
Case No. 17 MA 0093