Fifth Third Mtge., Co. v. Rankin

[Cite as Fifth Third Mtge., Co. v. Rankin, 2012-Ohio-2806.]
IN THE COURT OF APPEALS OF OHIO
FOURTH APPELLATE DISTRICT
PICKAWAY COUNTY
FIFTH THIRD MORTGAGE COMPANY, : Case No. 11CA8
Plaintiff-Appellee, :
v. :
DECISION AND
JOHN RANKIN, ET AL., : JUDGMENT ENTRY
Defendants-Appellants, : RELEASED 05/30/2012
APPEARANCES:
John Rankin, Williamsport, Ohio, pro se appellant.
Melissa N. Meinhart and Thomas G. Widman, Manley Deas Kochalski LLC, Columbus,
Ohio, for appellee.
FRENCH, J.
{¶ 1} Defendant-appellant, John Rankin ("Rankin"), appeals the Pickaway
County Court of Common Pleas' order confirming a sheriff's sale in this foreclosure
action initiated by plaintiff-appellee, Fifth Third Mortgage Company ("Fifth Third"). Fifth
Third moves this court for an order granting leave to supplement the record and to
dismiss this appeal as moot. For the following reasons, we deny Fifth Third's motion
and affirm the trial court's judgment.
I. BACKGROUND
{¶ 2} On July 29, 2010, Fifth Third filed a complaint against Rankin and various
other defendants, requesting foreclosure on real property owned by Rankin and located
at 324 South Court Street, Circleville, Ohio. Rankin filed a pro se answer, and Fifth
Third subsequently moved for summary judgment. The trial court granted Fifth Third's
Pickaway App. No. 11CA8 2
motion and issued a Judgment Entry and Decree in Foreclosure on December 6, 2010,
which this court affirmed. See Fifth Third Mtge. Co. v. Rankin, 4th Dist. No. 10CA45,
2011-Ohio-2757 ("Rankin I").
{¶ 3} On March 1, 2011, while Rankin I was pending in this court, the subject
property sold at sheriff's sale. The same day, Rankin, who was the highest bidder, filed
a motion to vacate the sheriff's sale for alleged noncompliance with the notice
requirements of R.C. 2329.26(A)(1). On April 8, 2011, the trial court entered a
Confirmation Entry of Sale and Distribution of Proceeds ("Confirmation Entry"), and, on
April 14, 2011, the trial court denied Rankin's motion to vacate the sheriff's sale. Rankin
filed a timely Notice of Appeal from the Confirmation Entry.
{¶ 4} On August 5, 2011, Fifth Third moved the trial court for a finding of
contempt to vacate the sheriff's sale and Confirmation Entry, for forfeiture of Rankin's
deposit, and to preclude Rankin from bidding at a future sheriff's sale, based on
Rankin's failure to remit the balance of the purchase price. The trial court granted Fifth
Third's motion the same day. Rankin appealed the August 5, 2011 order in Fifth Third
Mtge. Co. v. Rankin, 4th Dist. No. 11CA18 ("Rankin II").
II. MOTION TO DISMISS
{¶ 5} Fifth Third filed a motion to dismiss in case No. 11CA18, but clearly
intended the motion for this matter, case No. 11CA8. In its motion, Fifth Third states
that this court granted it leave during oral argument, held April 17, 2012, to file a motion
to dismiss. The April 17, 2012 oral argument was for case No. 11CA8. Fifth Third also
argues that Rankin's assignments of error regarding the propriety of the Confirmation
Entry, as set forth in case No. 11CA8, are moot because the trial court subsequently
Pickaway App. No. 11CA8 3
vacated the Confirmation Entry. Finally, Fifth Third had already filed a motion to dismiss
in case No. 11CA18. We therefore consider this motion as a motion to dismiss case
No. 11CA8.
{¶ 6} Concurrently with this decision, this court has granted Fifth Third's motion
to dismiss case No. 11CA18, based on the trial court's lack of jurisdiction to vacate the
sheriff's sale and Confirmation Entry while Rankin's appeal from the Confirmation Entry
was pending in case No. 11CA8. In addition to dismissing case No. 11CA18, our order
in that case vacates the trial court's August 5, 2011 order. Accordingly, the trial court's
Confirmation Entry remains in effect, and the matter before us here, case No. 11CA8, is
not moot. For these reasons, we deny Fifth Third's motion to supplement the record
and dismiss this appeal.
III. ASSIGNMENTS OF ERROR
{¶ 7} We now turn to the merits of Rankin's appeal. Rankin asserts the
following assignments of error:
1. The Trial Court erred by issuing the Confirmation Entry
* * * and thereby created a collapse of due process by failing
to require a strict adherence to [R.C.] 2329.26(A)(1)(a)(ii).
2. The Trial Court erred by issuing the Confirmation Entry
* * * and thereby created a failure of due process by ignoring
the requirement of complete service under [R.C.]
2329.26(A)(1)(a)(i).
3. The Trial Court erred by issuing the Confirmation Entry
* * * and thereby created a failure of due process by refusing
to set aside the sale as required by [R.C.] 2329.27(B)(1).
Because all of Rankin's assignments stem from the trial court's decision to confirm the
sheriff's sale, we address the assignments of error together.
IV. DISCUSSION
Pickaway App. No. 11CA8 4
{¶ 8} R.C. Chapter 2329 sets forth procedures for executing against property.
The following provisions are relevant to the parties' arguments in this case.
{¶ 9} R.C. 2329.26(A)(1) sets forth written notice requirements applicable to
sales of land on execution, as follows:
(A) Lands and tenements taken in execution shall not be
sold until all of the following occur:
(1)(a) Except as otherwise provided in division (A)(1)(b) of
this section, the judgment creditor who seeks the sale of the
lands and tenements or the judgment creditor's attorney
does both of the following:
(i) Causes a written notice of the date, time, and place of the
sale to be served in accordance with divisions (A) and (B) of
Civil Rule 5 upon the judgment debtor and upon each other
party to the action in which the judgment giving rise to the
execution was rendered;
(ii) At least seven calendar days prior to the date of the sale,
files with the clerk of the court that rendered the judgment
giving rise to the execution a copy of the written notice
described in division (A)(1)(a)(i) of this section with proof of
service endorsed on the copy in the form described in
division (D) of Civil Rule 5.
Division (A)(2) of that section requires the officer taking lands and tenements to give
public notice of the date, place, and time of the sale by publication.
{¶ 10} R.C. 2329.31 governs confirmation of foreclosure sales and provides, in
relevant part, as follows:
(A) Upon the return of any writ of execution for the
satisfaction of which lands and tenements have been sold,
on careful examination of the proceedings of the officer
making the sale, if the court of common pleas finds that the
sale was made, in all respects, in conformity with sections
2329.01 to 2329.61 of the Revised Code, it shall, within thirty
days of the return of the writ, direct the clerk of the court of
common pleas to make an entry on the journal that the court
is satisfied of the legality of such sale * * *.
Pickaway App. No. 11CA8 5
{¶ 11} A trial court may set aside a sheriff's sale in accordance with R.C.
2329.27(A) or (B). R.C. 2329.26(B). As relevant here, R.C. 2329.27(B)(1) states as
follows:
Subject to divisions (B)(2) and (3) of this section, all sales of
lands and tenements taken in execution that are made
without compliance with the written notice requirements of
division (A)(1)(a) of section 2329.26 of the Revised Code
[and] the public notice requirements of division (A)(2) of that
section * * * shall be set aside, on motion by any interested
party, by the court to which the execution is returnable.
R.C. 2329.27(B)(3) addresses the effect of a confirmation of sale and provides, in
pertinent part, that a confirmation order is deemed to constitute a judicial finding, as
follows:
(i) That the sale * * * complied with the written notice
requirements of division (A)(1)(a) of section 2329.26 of the
Revised Code and the public notice requirements of division
(A)(2) of that section * * *, or that compliance of that nature
did not occur but the failure to give a written notice to a party
entitled to notice under division (A)(1)(a) of section 2329.26
of the Revised Code has not prejudiced that party;
(ii) That all parties entitled to notice under division (A)(1)(a)
of section 2329.26 of the Revised Code received adequate
notice of the date, time, and place of the sale of the lands
and tenements.
{¶ 12} "[I]t has long been recognized that the trial court has discretion to grant or
deny confirmation: 'Whether a judicial sale should be confirmed or set aside is within the
sound discretion of the trial court.' " Ohio Sav. Bank v. Ambrose, 56 Ohio St.3d 53, 55
(1990), quoting Michigan Mtge. Corp. v. Oakley, 68 Ohio App.2d 83 (1st Dist.1980),
paragraph two of the syllabus. The trial court's exercise of discretion "must be
bottomed upon the factual situations surrounding each sale." Merkle v. Merkle, 116
Ohio App. 370, 372 (4th Dist.1961). We review a trial court's decision to confirm or
Pickaway App. No. 11CA8 6
vacate a sheriff's sale under an abuse of discretion standard. Commercial Fed. Mtge.
Corp. v. Sarson, 4th Dist. No. 00CA09 (Aug. 29, 2000); Hall v. Vance, 4th Dist. No.
08CA16, 2009-Ohio-4945, ¶ 10. "Thus, we must fully examine the proceedings to
determine their regularity and will only reverse the trial court's confirmation of the sale if
we determine that the trial court's confirmation was unreasonable, arbitrary or
unconscionable." Id. We are not free to merely substitute our judgment for that of the
trial court. Sarson.
{¶ 13} Rankin maintains that the trial court erred by confirming the sheriff's sale
because Fifth Third failed to comply with the notice requirements of R.C.
2329.26(A)(1)(a). Although he does not dispute his receipt of written notice, Rankin
argues that Fifth Third did not serve notice upon his legal counsel in accordance with
R.C. 2329.26(A)(1)(a)(i), pursuant to Civ.R. 5(B), which states that, when service is
required upon a party who is represented by an attorney of record in the proceedings,
service shall be made upon the attorney unless the court orders service upon the party.
With respect to R.C. 2329.26(A)(1)(a)(ii), Rankin also argues that Fifth Third failed to file
a copy of its Notice of Sale and proof of service with the clerk of court at least seven
days before the sale. Rankin contends that, absent compliance with the requirements
of R.C. 2329.26(A)(1)(a), confirmation constitutes a violation of his rights to due
process.
{¶ 14} Because Rankin inserts the concept of due process into each of his
assignments of error, we briefly address the requirements of due process before
addressing compliance with the requirements of R.C. 2329.26(A)(1)(a). "[T]he minimum
requirement of due process in any judicial deprivation of life, liberty or property is notice
Pickaway App. No. 11CA8 7
and an opportunity to be heard appropriate to the case." Cent. Trust Co., N.A. v.
Jensen, 67 Ohio St.3d 140, 142 (1993), citing Mullane v. Cent. Hanover Bank & Trust
Co., 339 U.S. 306 (1950). In Jensen, at 143, the Supreme Court of Ohio recognized, in
the context of a foreclosure sale, that "notice at least by mail is a constitutional
prerequisite to a proceeding that adversely affects a property interest where the interest
holder's address is known or easily ascertainable." Thus, notice of a foreclosure sale
only by publication is insufficient to satisfy due process to a party to the foreclosure
action or a person having an interest therein whose address is known or easily
ascertainable. Id. at 144; but see PHH Mtge. Corp. v. Prater, 12th Dist. No. CA2010-
12-095, 2011-Ohio-3640, ¶ 15 (holding that Jensen is not so rigid as to forbid an
alternative form of notice, so long as the alternative is equally as reliable as mail).
{¶ 15} R.C. 2329.26(A)(1)(a)(i) codifies the due-process requirements recognized
in Jensen. See Beneficial Ohio, Inc. v. Primero, L.L.C., 166 Ohio App.3d 462, 2006-
Ohio-1566, ¶ 7 (1st Dist.). In opposition to Rankin's motion to vacate the sheriff's sale,
Fifth Third responded to Rankin's claim of noncompliance with R.C. 2329.26(A)(1)(a)(i)
by submitting a copy of its Notice of Sale, which contains a certificate of service
indicating that Fifth Third mailed the notice to Rankin personally and to all other parties
on February 17, 2011. Rankin does not dispute his receipt of the Notice of Sale, but
argues that Fifth Third failed to serve notice upon his attorneys.
{¶ 16} Although Rankin has acted pro se throughout the vast majority of these
proceedings, on January 31, 2011, attorneys Todd H. Neuman and Rick L. Ashton filed
a motion, on behalf of Rankin, for reconsideration of the trial court's denial of Rankin's
Pickaway App. No. 11CA8 8
motion for a stay pending the appeal in Rankin I. Those attorneys also filed a reply in
support of that motion on February 11, 2011. Every other filing by Rankin was pro se.
{¶ 17} Fifth Third admits that its certificate of service does not indicate service of
the Notice of Sale upon Neuman and/or Ashton. Nevertheless, Fifth Third also
submitted to the trial court an email, dated February 17, 2011, addressed to Neuman
and Ashton. The email, signed by a paralegal for Fifth Third's attorney, acknowledged
the omission of the attorneys from the certificate of service and provided a copy of the
Notice of Sale as an attachment. Fifth Third also represented that it mailed a copy of
the Notice of Sale to Neuman and Ashton the same day, upon realizing it had not listed
them on the certificate of service.
{¶ 18} Rankin disputes that Fifth Third mailed a copy of the Notice of Sale to
Neuman and Ashton and contends that email service is insufficient under Civ.R. 5.
Upon the record before this court, however, we cannot conclude that the trial court
abused its discretion by determining that Fifth Third satisfied the requirements of R.C.
2329.26(A)(1)(a)(i). First, under Civ.R. 5(B), service upon a party's attorney of record is
a means of accomplishing service upon the party, and, here, it is undisputed that
Rankin, himself, was served via ordinary mail and had actual knowledge of the date,
time, and place of the sheriff's sale. Even assuming that Neuman and Ashton were
Rankin's attorneys of record for purposes beyond the motion they filed, this court has
held that service upon a party rather than upon the party's attorney, as required by
Civ.R. 5(B), is not fatal where the party has actual notice of the filings and attends the
noticed proceeding. See Schroeder v. Dailey, 4th Dist. No. 08CA0321, 2008-Ohio-
6100, ¶ 8 (holding that the appellant waived any argument related to service upon
Pickaway App. No. 11CA8 9
herself, as opposed to upon her attorney, where she appeared pro se at subsequent,
scheduled hearings). Moreover, Rankin provided no evidence to contradict Fifth Third's
representation that it mailed notice to Neuman and Ashton on February 17, 2011. In
light of the actual service of the Notice of Sale upon Rankin, Fifth Third's assertion that it
emailed and mailed a copy of the Notice of Sale to Neuman and Ashton, and the lack of
evidence to contradict Fifth Third's assertion, the trial court acted within its discretion to
determine that Fifth Third satisfied the requirements of R.C. 2329.26(A)(1)(a)(i).
{¶ 19} Rankin next argues that the trial court erred by confirming and refusing to
vacate the sheriff's sale because Fifth Third did not file a copy of its Notice of Sale with
the clerk of court at least seven days before the sale, as required by R.C.
2329.26(A)(1)(a)(ii). It is undisputed that Fifth Third mistakenly mailed its Notice of Sale
to the Lucas County Court of Common Pleas for filing and did not file its Notice of Sale
with the trial court until it submitted a copy in opposition to Rankin's motion to vacate the
sheriff's sale. Nevertheless, Fifth Third argues that the trial court did not abuse its
discretion by confirming the sale because Fifth Third served actual notice to all parties
and their counsel, published notice in accordance with statutory requirements, and
attempted, in good faith, to file its Notice of Sale with the trial court. Fifth Third also
points out the trial court's awareness, prior to confirmation, that Rankin had been served
with notice of the sale and that the sale was properly advertised to the public.
{¶ 20} This court addressed the statutory basis for confirming a foreclosure sale
in Rak-Ree Ents., Inc. v. Timmons, 101 Ohio App.3d 12 (4th Dist.1995), where we
stated that R.C. 2329.31 "requires a careful examination of the proceedings leading to
the sale, and requires assurance that the sale was made, in all respects, in conformity
Pickaway App. No. 11CA8 10
with the statutes." (Emphasis sic.) Id. at 18. In Rak-Ree, the advertisements for the
sheriff's sale incorrectly identified the sale date. While the sheriff sold the land at issue
on Tuesday, March 29, 1994, the first three advertisements listed the sale date as
Tuesday, March 28, 1993, whereas the fourth advertisement listed the date as Tuesday,
March 29, 1993. The appellant in Rak-Ree filed an unsuccessful motion to stay the sale
based on the publication errors and also unsuccessfully opposed a motion to confirm
the sale at a hearing prior to confirmation. We concluded that, under the circumstances
of that case, the trial court abused its discretion by confirming the sale.
{¶ 21} Despite Rankin's contention that Rak-Ree compels reversal here, we find
that case distinguishable, both on its facts and because a different statutory provision
was at issue. Rak-Ree involved a failure of the publication requirement of R.C.
2329.26(A)(2), as opposed to a judgment creditor's failure to file a copy of its notice of
sale with the clerk of court under R.C. 2329.26(A)(1)(a)(ii). In Rak-Ree, we recognized
the importance of advertising the date, time, and place of a sale to give the public notice
of the proposed sale. Id. at 17, citing Mellon Fin. Servs. Corp. #8 v. Russell, 11th Dist.
No. 90-A-1514 (Mar. 1, 1991). Our recognition is consistent with the primary goal of a
foreclosure sale–to protect the mortgagor's interest while ensuring that secured
creditors receive payment for unpaid debt. See Ambrose at 56. A corollary purpose is
to obtain the maximum amount of money from the sale, which is advanced by
maximizing the number of bidders at the sale. Id. R.C. 2329.26(A)(1)(a)(ii) serves a
different purpose of notifying the court of the judgment creditor's compliance with the
written notice requirements of R.C. 2329.26(A)(1)(a)(i) and does not as readily result in
prejudice to the judgment debtor.
Pickaway App. No. 11CA8 11
{¶ 22} The record in Rak-Ree demonstrated that the appellant was prejudiced by
the errors in advertising the sale. In Rak-Ree, the appellant argued, prior to the sale
and again prior to confirmation, that the incorrect advertisements would confuse
potential buyers and affect the price that might be realized from the sale. Based in part
on the sale price obtained at the sheriff's sale in Rak-Ree, the trial court entered a
$45,000 deficiency judgment against the appellant. In part because this case involves a
different statutory requirement, the prejudice suffered by the appellant in Rak-Ree is not
present here, where Rankin had actual notice of the sale date, attended the sale, and
was the highest bidder on the property. Moreover, notice of the sale was properly
advertised to the public, as required by R.C. 2329.26(A)(2). Unlike in Rak-Ree, all
parties and the public were on notice of the date, time, and place of the sale, and the
absence of a filing in the trial court would not have negatively affected the sale price of
the property and prejudiced Rankin. The parties' filings prior to confirmation notified the
court that all interested parties had actual advance notice of the date, time, and place of
the sheriff's sale, such that the trial court could determine compliance with R.C.
2329.26(A)(1)(a)(i) despite the absence of a filing pursuant to R.C. 2329.26(A)(1)(a)(ii).
We conclude that Fifth Third's mistaken delivery of its notice to the wrong court did not
prejudice Rankin.
{¶ 23} Rankin maintains that, regardless of prejudice, R.C. 2329.27(B)(1)
mandates the vacation of a sheriff's sale absent strict compliance with R.C.
2329.26(A)(1)(a). While that statute states that all sales made without compliance with
the notice requirements of R.C. 2329.26(A)(1)(a) "shall be set aside, on motion by any
interested party," the rule is subject to R.C. 2329.26(B)(2) and (3). R.C. 2329.27(B)(3),
Pickaway App. No. 11CA8 12
regarding the effect of a confirmation order, expressly contemplates that a trial court
may confirm a sale despite the lack of strict compliance with R.C. 2329.26(A)(1)(a).
R.C. 2329.27(B)(3)(a)(i) provides that confirmation constitutes either a judicial finding
that the sale complied with the requirements of R.C. 2329.26(A)(1)(a) "or that
compliance of that nature did not occur but the failure to give a written notice to a party
entitled to notice under [that section] has not prejudiced that party." Thus, lack of strict
compliance with R.C. 2329.26(A)(1)(a) does not render a confirmation order a per se
abuse of discretion. Rather, a trial court may clearly exercise its discretion to confirm a
sale where no prejudice results from a lack of specific compliance with the notice
requirements of R.C. 2329.26(A)(1)(a), and R.C. 2329.27(B)(1) does not eliminate that
discretion.
{¶ 24} Here, the Confirmation Entry constitutes a judicial finding that, although
Fifth Third did not comply with R.C. 2329.26(A)(1)(a)(ii), Rankin was not prejudiced by
the lack of compliance. As a result, R.C. 2329.27(B)(1) does not require that the
sheriff's sale be set aside. Additionally, other Ohio courts have held that " 'the final
order of confirmation, having the effect of a final conclusive judgment, cures all such
irregularities, misconduct, and unfairness in the making of the sale, departures from the
provisions of the decree of sale, and errors in the decree and the proceedings under
it.' " Citimortgage, Inc. v. Haverkamp, 12th Dist. No. CA2010-11-089, 2011-Ohio-2099,
¶ 17, quoting Peoples Liberty Bank & Trust Co. v. Cornett, 86 Ohio App. 222, 223-24
(1st Dist.1949).
{¶ 25} We have routinely noted that a trial court's discretion whether to confirm a
foreclosure sale must be evaluated in light of the factual circumstances of the particular
Pickaway App. No. 11CA8 13
case, and a trial court's determination in that regard will be reversed only upon an abuse
of discretion. See Hall at ¶ 10. Ultimately, the record contains no facts from which we
may conclude that the trial court acted unreasonably, arbitrarily or unconscionably by
determining that confirmation was appropriate, despite the lack of specific compliance
with the filing requirement under R.C. 2329.26(A)(1)(a)(ii), where no prejudice arose as
a result and all parties had actual knowledge of the date, time, and place of the sheriff's
sale. Moreover, Rankin's undisputed notice of the sheriff's sale and his status as the
successful bidder at the sale precludes any finding of a due process violation with
respect to Fifth Third's compliance or noncompliance with the notification requirements
in R.C. 2329.26(A)(1)(a).
V. CONCLUSION
{¶ 26} For these reasons, we deny Fifth Third's motion to dismiss, overrule each
of Rankin's assignments of error, and affirm the judgment of the Pickaway County Court
of Common Pleas.
MOTION DENIED;
JUDGMENT AFFIRMED.
Pickaway App. No. 11CA8 14
JUDGMENT ENTRY
It is ordered that the MOTION IS DENIED and the JUDGMENT IS AFFIRMED.
Appellant shall pay the costs.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Pickaway
County Common Pleas Court to carry this judgment into execution.
Any stay previously granted by this Court is hereby terminated as of the date of
this entry.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure. Exceptions.
* Brown, P.J. & Tyack, J.: Concur in Judgment and Opinion.
For the Court
BY: ________________________________
Judith L. French, Judge *
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment
entry and the time period for further appeal commences from the date of filing
with the clerk.
* Susan D. Brown, P.J., Judith L. French, J., and G. Gary Tyack, J., of the Tenth
Appellate District, sitting by assignment in the Fourth Appellate District.