Likover v. Cleveland

I concur in the judgment of affirmance with the following additional comment.

The intervenors below, the Sterns, sold Likover an apartment building. Ultimately, there were two mortgages on the property held by two savings and loan associations. The sellers, the Sterns, were personally liable on both mortgages, while Likover remained the fee holder.

Likover defaulted on his payments on the second mortgage, and foreclosure proceedings were commenced by the second mortgagee savings and loan. After the litigation was completed, the Sterns were required to pay off both mortgages, which they in fact did. However, the Sterns did not take title to the property, and title still remains in Likover. The record does not demonstrate why the Sterns did not take title or whether the Sterns became either mortgagees or lien holders as a result of satisfying the two mortgages. However, the Sterns claim that they are lien holders.

With Likover as the fee holder and owner of the property, the city demolished the building and Likover sued for trespass to real property in violation of R. C. 2305.09. The Sterns were not made parties as lien holders or on any other basis by either Likover or the city of Cleveland.

Following trial and entry of judgment for Likover in the amount of $35,500, the Sterns filed a motion to intervene on three bases: first, as real parties in interest; second, as lien holders; and third, as holders of an equitable interest. This motion was denied without explanation or hearing by the trial court.

If in fact the Sterns are real parties in interest they could maintain a wrongful demolition action against the city in their own right, or seek to intervene in the present action. If the Sterns are in fact mortgagees or lien holders, they should have been made parties to this litigation by either Likover or the city. This was not done. Also, if the Sterns are lien holders, they could intervene. If the Sterns have an equitable interest in the property they might be entitled to the proceeds of the sale as their interests would appear. An action based on this equitable interest could be brought by intervention in the instant litigation or by an independent action. Whether or not the Sterns are holders of an equitable interest, however, would have to be resolved at a trial.

The first question to be resolved is whether the motion to intervene was timely filed. In this case the motion to intervene was filed after trial and judgment.

Civil Rule 24 provides for intervention as a matter of right, Civ. R. 24 (A), and for permissive intervention, Civ. R. 24 (B). Both Civ. R. 24 (A) and (B) require "timely application" by a prospective intervenor. The issue of timely application provided for in Civ. R. 24 (A) and (B) is a matter to be determined within the trial court's discretion. Even though Civ. R. 24 (A) provides for intervention as a matter of right, the matter of timeliness is a matter within the trial court's discretion.

"Timely application" is not defined in Civil Rule 24. Hence, a motion to intervene may be granted at any stage of the proceedings within the trial court's discretion. However, courts may require that a motion to intervene be filed within a reasonable time. Unfortunately, the Ohio Civil Rule does not limit the filing of a motion to intervene to any express time. The general rule is that intervention will not be allowed after a final judgment or decree has been entered. While Civil Rule 24 does not make a distinction between intervention before and after final judgment, the rule generally is applied less liberally after the judgment. Thus, a heavy burden is placed on the person seeking intervention after judgment.

If the court determines that denial of the motion to intervene would result in substantial injustice, it must then determine whether the intervenor as a practical matter has another remedy, and whether granting intervention after judgment would unduly prejudice the existing parties to the lawsuit. If the court determines that denial of the motion would result in substantial injustice, and that the prospective intervenor has no practical alternative remedy, and that the original parties would not be unduly prejudiced by granting the motion, the court may grant the motion. In other words, where it is necessary to preserve a person's right which cannot otherwise be protected intervention may be allowed after final judgment.

Based on the allegations of intervenors Sterns' motion they clearly sought to intervene as a matter of right on the ground that they claim an "interest relating to the property or transaction which is the subject of the action". Civ. R. 24 (A).

In reviewing the material submitted by the intervenors Sterns, it is my conclusion that they have not sufficiently demonstrated by operative facts that they are real parties in interest. Also, as to their claim of being lien holders, they have only alleged that they are such and have not submitted any documentation or operative facts that they are in fact lien holders.

If the documentation or operative facts submitted by the intervenors Sterns would demonstrate that they are the real parties in interest or lien holders, I would have been in favor of reversing the trial court's order denying the motion to intervene even though it was filed after judgment.

As to the intervenors' claim of an equitable interest, the material submitted does raise an issue, which would have to be resolved at trial as to whether the Sterns have such an interest. If in fact the Sterns do have an equitable interest and are entitled to recover any of the proceeds received by Likover, an action for recovery could be had either through a timely motion to intervene in this litigation or by an independent action.

Again, in reviewing the material submitted by the Sterns, there is no allegation that they would be prejudiced by being denied intervention in this case and being forced to maintain an independent action against Likover in the event Likover recovers from the city of Cleveland. In addition, the Sterns did not present anything on the record to justify delay in moving to intervene until after judgment.

As a reviewing court, we are only called upon at this time to determine whether the trial court erred in denying the motion to intervene. I cannot say that the trial court abused its discretion as to timeliness in overruling the motion to intervene nor can it be said that the Sterns have shown that they are "so situated that the disposition of the action may as a practical matter impair or impede * * * [their] ability to protect [their equitable] interest * * *." Civ. R. 24(A).

It is noted, however, that while this court affirmed the trial court's judgment that the subject property was wrongfully demolished, it reversed the money judgment of $35,500 awarded by the trial court, and remanded the case for a new trial on that issue.

While we are affirming the trial court's denial of the Sterns' motion to intervene, it should be noted that the Sterns still have available two potential methods of seeking relief. The first involves the filing of a new motion to intervene. It has been held that where a judgment is reversed or vacated, and a new trial ordered, applications to intervene are to be determined by the same rules as would obtain as if no judgment had theretofore been rendered. Holland v. Board of PublicInstruction (C.A. 5, 1958), 258 F.2d 730; Paine v. Copper BelleMin. Co. (1911), 13 Ariz. 406, affirmed 232 U.S. 595. Thus, the appellants could file a new motion to intervene with the appropriate documentation to support their contentions. In the alternative the Sterns could file an independent action against Likover, with or without a motion to consolidate with the remanded case.

As to appellants' second assignment of error, it should be noted that findings of fact and conclusions of law are not required upon a motion to intervene. Civ. R. 52.

Based on the foregoing, I would affirm the judgment of the trial court denying the motion to intervene.