Bish Constr. v. Wickham

[Cite as Bish Constr. v. Wickham, 2013-Ohio-421.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
SENECA COUNTY
BISH CONSTRUCTION, INC.,
PLAINTIFF-APPELLEE,
v. CASE NO. 13-12-16
JASON S. WICKHAM, ET AL.,
DEFENDANTS-APPELLANTS,
-and-
STATE OF OHIO DEPARTMENT OPINION
OF TAXATION, ET AL.,
DEFENDANTS-APPELLEES.
Appeal from Seneca County Common Pleas Court
Trial Court No. 08-CV-0069
Judgment Affirmed
Date of Decision: February 11, 2013
APPEARANCES:
Grace M. Doberdruk for Appellants
Gregory A. Stout for Appellee, Bish Construction, Inc.
Case No. 13-12-16
WILLAMOWSKI, J.
{¶1} Defendants-Appellants, Jason and Victoria Wickham (“the
Wickhams”), appeal the judgment of the Seneca County Court of Common Pleas
denying their Civ.R. 60(B) motion for relief from judgment concerning the
consent judgment entry and decree of foreclosure on their property. On appeal,
the Wickhams contend that the trial court should have granted their 60(B)(5)
motion because a fraud had been perpetrated on the court. For the reasons set
forth below, the judgment is affirmed.
{¶2} In September of 2004, the Wickhams signed a Note for $152,983,
secured by a mortgage (the “Mortgage”) granted by the Wickhams to Mortgage
Electronic Registration Systems, Inc. (“MERS”) as nominee for the lender, Full
Spectrum Lending, Inc. The Mortgage was a valid first lien upon the real property
at 2727 W US Highway 224, Tiffin, Ohio. The Mortgage was recorded in Seneca
County, and was later assigned to the Bank of New York (hereinafter “BONY”)
via an “Assignment of Mortgage” executed on July 18, 2008 and recorded on July
30, 2008, at Instrument No. 200800132510 of the Seneca County, Ohio records.
{¶3} On January 31, 2008, Bish Construction, Inc., filed a foreclosure
complaint against the Wickhams based upon a mechanic’s lien. Also named as
defendants were Full Spectrum Lending, MERS, the Ohio Department of
Taxation, and the Seneca County Treasurer.
-2-
Case No. 13-12-16
{¶4} On July 30, 2008, BONY filed an amended answer and cross-claim.
BONY filed as Trustee for the Certificate holders CWABS, Inc., Asset-Backed
Certificates, Series 2004-10 as successor by assignment to MERS. BONY
asserted that the Wickhams had been in default since October 2007. BONY
sought to have the Mortgage foreclosed and the property sold at sheriff’s sale.
{¶5} Plaintiff Bish Construction’s complaint with the Wickhams was
resolved by a consent journal entry of judgment in September 2008, and Bish
Construction was dismissed from the foreclosure action and is not a party to this
appeal. The issues relevant to this appeal pertain to the cross-claim between
BONY and the Wickhams.
{¶6} Thereafter, the Wickhams, who were represented by counsel, entered
into a Consent Judgment Entry and Decree of Foreclosure (the “Consent
Judgment”) with BONY, which was filed on January 21, 2009. The Consent
Judgment stated:
By agreement of the parties, Defendant Bank of New York as
Trustee for the Certificate holders CWABS, Inc. Asset-Backed
Certificates, Series 2004-10 as successor by assignment to [MERS]
acting solely as nominee for Full Spectrum Lending, Inc. is entitled
to a Judgment and Decree on its Cross-claim.
The Consent Judgment further provided BONY would agree to not execute on the
Consent Judgment for sixty days, for the purposes of circulating an updated loan
modification agreement, with terms previously negotiated.
-3-
Case No. 13-12-16
{¶7} Eight days later, on January 29, 2009, the Wickhams filed for Chapter
7 Bankruptcy and the trial court stayed the proceedings, due to the bankruptcy
proceedings. On May 22, 2009, the Wickhams received a discharge of their
obligations, thereby extinguishing their personal liability for any potential
deficiency balance.
{¶8} On August 26, 2011, BONY filed a Motion to Reactivate the case in
order to proceed with execution of its judgment and the court granted this motion
on August 29, 2011. The property was scheduled to be sold at sheriff’s sale on
December 18, 2011. Prior to the sale, the Wickhams, through new counsel, filed a
Civ.R. 60(B)(5) motion to vacate and a Civ.R. 12(B)(1) motion to dismiss. Briefs
were filed and on January 4, 2012, the trial court held a hearing on the Wickham’s
motions.
{¶9} The Wickhams asserted that BONY perpetrated a fraud upon the court
because the cross-claim was defective. The Wickhams claimed that BONY
“failed to attach an assignment of mortgage and a note with an indorsement in
accordance with Ohio Civil Rule 10(D) * * *.” (12/7/11 Mtn., R-63) Although
BONY did attach an “Assignment of Mortgage,” the Wickhams claimed that it
was signed by a “robo-signer” and they also contend that the transfer to the trust
was not in compliance with the controlling “Pooling and Service Agreement” and
was not valid. Therefore, they maintain that BONY didn’t own the note at the
-4-
Case No. 13-12-16
time of the filing of the cross-claim and lacked standing to bring its complaint and
obtain a valid judgment.
{¶10} BONY opposed the motion to vacate judgment, claiming (1) their
motion was barred under the doctrine of res judicata, because the issues they
raised were all resolved through the consent judgment; (2) the motion is untimely
under Civ.R. 60(B); and, (3) the Wickhams have not established a meritorious
defense or claim. BONY claimed that the Wickhams failed to assert a meritorious
defense because they provided no evidence whatsoever in support of their motion
and merely made conclusory statements that were not supported. BONY also
claims the Wickhams are estopped from raising the “real party in interest” defense
because it was previously waived and that they lack standing to challenge the
transfer of the Note and Assignment of Mortgage documents.
{¶11} On February 15, 2012, the trial court denied the Wickham’s Civ.R.
60(B)(5) motion to vacate and Civ.R. 12(B)(1) motion to dismiss. The trial court
acknowledged that “a party who failed to establish itself as a real party in interest
lacks standing to invoke the jurisdiction of the court.” (2/15/12 J.E.) However,
the trial court found that “BONY established itself as a real party in interest when
it attached a copy of the note and mortgage to its Amended Answer and Cross-
Claim filed July 30, 2008.” Id. The trial court also found that BONY
-5-
Case No. 13-12-16
demonstrated that it possessed the rights of a holder through its possession of the
Note and the Assignment of Mortgage.
{¶12} It is from this judgment that the Wickhams now appeal, raising the
following assignment of error for our review.
Assignment of Error
The trial court erred by denying [the Wickhams’] 60(B)(5)
motion to vacate when a fraud had been perpetrated on the
court.
{¶13} The Wickhams contend that the assignment of mortgage prepared by
BONY’s counsel and the judgment entry are both frauds upon the court because
they give the false impression to the court that BONY, as trustee, obtained
ownership of the Wickhams’ loan. They claim that their motion was timely
because they allegedly “only recently learned” of the “robo-signer status” of the
signer of the assignment documentation.
{¶14} Civil Rule 60(B) provides the means that a party may obtain relief
from judgment under certain specified circumstances.
On motion and upon such terms as are just, the court may relieve a
party or his legal representative from a final judgment, order or
proceeding for the following reasons:
(1) mistake, inadvertence, surprise or excusable neglect;
(2) newly discovered evidence which by due diligence could not
have been discovered in time to move for a new trial under Rule
59(B);
-6-
Case No. 13-12-16
(3) fraud (whether heretofore denominated intrinsic or extrinsic),
misrepresentation or other misconduct of an adverse party;
(4) the judgment has been satisfied, released or discharged, or a
prior judgment upon which it is based has been reversed or
otherwise vacated, or it is no longer equitable that the judgment
should have prospective application; or
(5) any other reason justifying relief from the judgment.
The motion shall be made within a reasonable time, and for reasons
(1), (2) and (3) not more than one year after the judgment, order or
proceeding was entered or taken. A motion under this subdivision
(B) does not affect the finality of a judgment or suspend its
operation.
Civ.R. 60(B).
{¶15} To prevail on a motion for relief from judgment under Civ.R. 60(B),
a party must demonstrate: (1) a meritorious defense or claim; (2) entitlement to
relief under one of the grounds stated in Civ.R. 60(B)(1) through (5); and (3)
timeliness of the motion. GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47
Ohio St.2d 146, (1976), paragraph two of the syllabus. These requirements are
independent and in the conjunctive; thus the test is not fulfilled if any one of the
requirements is not met. Strack v. Pelton, 70 Ohio St.3d 172, 174 (1994).
{¶16} Civ.R. 60(B)(5) permits relief from judgment for “any other reason
justifying relief from the judgment,” and is intended as a catch-all provision
reflecting the inherent power of a court to relieve a person from the unjust
-7-
Case No. 13-12-16
operation of a judgment. However, it is not to be used as a substitute for any of
the more specific provisions of Civ.R. 60(B) and the grounds should be
substantial. Caruso–Ciresi, Inc. v. Lohman, 5 Ohio St.3d 64, (1983) paragraphs
one and two of the syllabus. Relief on this ground should be granted only in
extraordinary situations, where the interests of justice require it. Bank of New
York v. Stilwell, 5th Dist. No. 12 CA 3, 2012-Ohio-4123, ¶ 34. Furthermore, it is
well settled that Civ.R. 60(B) “is not available as a substitute for a timely appeal *
* * nor can the rule be used to circumvent or extend the time requirements for an
appeal.” Blasco v. Mislik, 69 Ohio St.2d 684, 686 (1982). It is a fundamental
legal principle that there should be finality in every case, and that once judgment
is entered it should be disturbed only under the proper circumstances. Eubank v.
Mardoian, 9th Dist. No. 11CA009968, 2012-Ohio-1260, ¶ 12, citing Adomeit v.
Baltimore, 39 Ohio App.2d 97, 100 (8th Dist.1974).
{¶17} In a review of a trial court's denial of a motion for relief from
judgment pursuant to Civ.R. 60(B), a reviewing court must determine whether the
trial court abused its discretion. Harris v. Anderson, 109 Ohio St.3d 101, 2006–
Ohio1934, ¶ 7. A trial court will be found to have abused its discretion when its
decision is contrary to law, unreasonable, not supported by the evidence, or
grossly unsound. See State v. Boles, 2d Dist. No. 23037, 2010–Ohio–278, ¶ 17–18;
Bank of New York v. Roether, 3d Dist. No. 1-11-56, 2012-Ohio-1465, ¶ 13. When
-8-
Case No. 13-12-16
applying the abuse of discretion standard, a reviewing court may not substitute its
judgment for that of the trial court. Blakemore v. Blakemore, 5 Ohio St.3d 217,
219 (1983).
{¶18} Civ.R. 60(B) strikes a balance between the competing principles of
finality of judgments and perfect results by vesting the courts with broad, but not
unlimited, authority to set aside judgments. Crouser v. Crouser, 39 Ohio St. 3d
177, 180-181(1988). This is necessary in order to provide certainty in the law and
confidence in the system's ability to resolve disputes. Id.{¶19} We do not find that the trial court has abused its discretion in this
case for several reasons. The trial court found that the Wickham’s motion for
relief from judgment should not be granted because they failed to present a
meritorious defense. The trial court’s finding of fact should be given great
deference because it is in the better position to evaluate the evidence. However, in
this case there was no evidence of at least affidavit quality of the Wickham’s
claims of “fraud.” Their assertions using the “buzz-words” of “robo-signer” were
not supported by any testimony or evidence, but only by their unsupported and
unsubstantiated claims. The trial court found that BONY was entitled to enforce
the Mortgage and there was no actual evidence presented by the Wickhams
contrary to this finding.
-9-
Case No. 13-12-16
{¶20} We further question the timeliness of the Wickham’s motion. Even if
their assertions were true, it would appear more likely to have been a fraud upon
the mortgagors, rather than a fraud upon the court. See, e.g., Coulson v. Coulson,
5 Ohio St. 3d 12 (1983); Austin v. Payne, 107 Ohio App. 3d 818 (9th Dist.1995)
(both discussing distinctions between the two types of fraud). However, normal
fraud involving the parties would have been time-barred under Civ.R. 60(B)(3)
because their motion was filed more than one year after the judgment. It seems as
if their claim of “fraud upon the court” was meant to circumvent this. And again,
even if we were to assume that this constituted a cause for relief under Civ.R.
60(B)(5), we still do not find that the motion, filed thirty-five months after the
parties had entered into a Consent Judgment, was filed within a “reasonable time.”
There was no new information offered or facts presented that were not available to
the Wickhams at the time they agreed to the Consent Judgment, acknowledging
BONY’s right to enforce the Mortgage. It would appear that the impending
sheriff’s sale may have been more of a motivation for the filing of the motion
rather than any “newly discovered evidence.”
{¶21} Subsequent to the oral arguments in this case, on October 31, 2012,
the Supreme Court of Ohio decided Fed. Home Loan Mtge. Corp. v.
Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, involving a mortgage holder
that brought foreclosure action against mortgagors and then was subsequently
-10-
Case No. 13-12-16
assigned the note and mortgage. The Ohio Supreme Court held that the plaintiff
did not have an interest in the note or mortgage at the time it filed the foreclosure
action and, therefore, had no standing to invoke jurisdiction of common pleas
court. Id. A litigant cannot cure a lack of standing after commencement of the
action by obtaining an interest in the subject of the litigation and substituting itself
as the real party in interest. Id.{¶22} The Wickhams filed a notice of supplemental authority, claiming that
their case should also have been dismissed because there was no assignment of the
Mortgage to BONY at the time the complaint was filed against the Wickhams.
However, we find that Schwartzwald is not applicable to the facts in this case.
Although the original complaint by Bish Construction was filed while MERS was
still the real party in interest on the Mortgage, BONY’s amended answer and cross
complaint, filed on July 30, 2008 was filed after the assignment of Mortgage was
executed on July 18, 2008.1
{¶23} The trial court did not abuse its discretion when it did not find that
there were adequate grounds for granting the Wickhams’ motion for relief from
judgment. The assignment of error is overruled.
1
Even before BONY obtained permission from the court to file its amended cross-claim, the original cross-
claim was filed July 21, 2008, also after the execution of the assignment of the Mortgage.
-11-
Case No. 13-12-16
{¶24} Having found no error prejudicial to the Appellant herein in the
particulars assigned and argued, we affirm the judgment of the trial court.
Judgment Affirmed
PRESTON, P.J., concurs.
ROGERS, J., concurs in Judgment Only.
/jlr
-12-