DocketNumber: No. 24012.
Citation Numbers: 894 N.E.2d 65, 177 Ohio App. 3d 114, 2008 Ohio 2959
Judges: Per Curiam.
Filed Date: 6/18/2008
Status: Precedential
Modified Date: 1/13/2023
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 116 {¶ 1} Appellants, Andrew and Donielle Hopkins, appeal the judgment of the Summit County Court of Common Pleas, which entered judgment in favor of Appellee, Fifth Third Bank. This court affirms.
{¶ 3} On March 21, 2006, ABN AMRO Mortgage Group, Inc. ("ABN AMRO") filed a complaint in foreclosure against Andrew and Donielle Hopkins in the Portage County Court of Common Pleas. ABN AMRO alleged that Mr. and Mrs. Hopkins had defaulted on a note secured by a mortgage on property located at 555 Franklin Avenue in Kent, Ohio. ABN AMRO alleged that its mortgage constituted a valid first lien on the real estate and named Fifth Third Bank as a defendant entitled to claim an interest in the property by virtue of mortgages in its favor on the same property. In its prayer for relief, ABN AMRO prayed that "all the other defendants herein be required to set up their liens or interests in said real estate or be forever barred from asserting same." Neither Mr. and Mrs. Hopkins nor Fifth Third Bank filed answers, and ABN AMRO sought default judgment. The Portage County Court of Common Pleas granted default judgment in favor of ABN AMRO, ordered that the real estate be foreclosed and sold, and ordered that the proceeds be paid in the established order of priority.
{¶ 4} On September 27, 2006, Fifth Third Bank filed a complaint for money due regarding the promissory note executed by Andrew Hopkins on June 21, 2002. In November 2006, Fifth Third Bank filed a complaint for money due regarding *Page 117 the equity credit agreement executed by Andrew and Donielle Hopkins on July 16, 2002. The two cases were consolidated in the trial court.
{¶ 5} Mr. and Mrs. Hopkins timely answered, asserting res judicata as an affirmative defense. They asserted that the identical claims were litigated on the merits in the case before the Portage County Court of Common Pleas.
{¶ 6} The parties filed trial briefs. The trial court issued an order wherein it noted that the parties represented that they wished to proceed in the matter on the basis of their briefs and an agreed-upon stipulation of facts. The parties stipulated that Fifth Third Bank filed a claim against Andrew Hopkins seeking money damages for failure to pay as agreed pursuant to the terms of a promissory note, that Fifth Third Bank filed a claim against Andrew and Donielle Hopkins seeking money damages for failure to pay as agreed pursuant to the terms of an equity credit agreement, and that both the note and equity agreement were secured by mortgages on real property identified as 555 Franklin Avenue, Kent, Ohio. The parties stipulated that these mortgages were junior to the primary mortgage on the property held by ABN AMRO. The parties further stipulated that ABN AMRO filed a foreclosure complaint, asserting claims against Mr. and Mrs. Hopkins and Fifth Third Bank; that ABN AMRO was granted default judgment; and that the trial court found that ABN AMRO had the first lien on the real property. Finally, the parties stipulated that should Fifth Third Bank prevail on its brief, the trial court would render judgment in favor of Fifth Third Bank for the amount prayed for in each complaint, whereas should Andrew and Donielle Hopkins prevail on their brief, then the trial court would enter judgment in favor of them.
{¶ 7} On November 19, 2007, the trial court issued a judgment entry in which it found that Fifth Third Bank's claims for money damages were not barred by the doctrine of res judicata. The trial court entered judgment in favor of Fifth Third Bank. Andrew and Donielle Hopkins timely appealed, raising one assignment of error for review.
The trial court erred in its November 19, 2007 decision that the appellee's complaints against the appellants were not barred by the defense of "res judicata."
{¶ 8} Andrew and Donielle Hopkins argue that the trial court erred by finding that Fifth Third Bank's claims were not barred by the doctrine of res judicata. This court disagrees. *Page 118
{¶ 9} Under the doctrine of res judicata, "[a] valid, final judgment rendered upon the merits bars all subsequent actions based upon any claim arising out of the transaction or occurrence that was the subject matter of the previous action." Grava v. Parkman Twp. (1995),
{¶ 10} In addition, Ohio law has long recognized that "`an existing final judgment or decree between the parties to litigation is conclusive as to all claims which were or might have been litigated in a first lawsuit.'" (Emphasis omitted.)Natl. Amusements, Inc. v. Springdale (1990),
{¶ 11} Andrew and Donielle Hopkins argue that the parties in the Portage County case are identical and that Fifth Third Bank had the opportunity to assert its claims in that prior case. This court disagrees.
{¶ 12} In the prior case, Mr. and Mrs. Hopkins and Fifth Third Bank were not adverse parties; rather they were co-parties. See Huntington Natl. Bank v. Ross (1998),
{¶ 13} Andrew and Donielle Hopkins further argue that res judicata bars Fifth Third Bank's claims because the remedies in the prior and instant actions are identical. This court disagrees.
{¶ 14} In the Portage County case, the remedy sought by ABN AMRO was that its mortgage be adjudged a valid first lien, that the property be ordered sold, and that all other lienholders set up their liens or interests in the property or be forever barred from doing so. Fifth Third Bank declined to set up its liens or interests in the property and is, therefore, barred from subsequently doing so. Yet Fifth Third Bank is not here pursuing any interest in the 555 Franklin Avenue property. On the contrary, it is seeking money damages for Andrew and Donielle Hopkins's failure to pay as required under the terms of a note and equity agreement.
{¶ 15} This court has stated:
The right to judgment on the note is one cause of action. The right to foreclose a mortgage is another cause of action. One is legal — the other is equitable.
Fed. Deposit Ins. Corp. v. Simon (Aug. 17, 1977), 9th Dist. No. 8443,
{¶ 16} In the instant case, Fifth Third Bank is suing to collect on a debt owed. "A mortgage is merely security for a debt and is not the debt itself." Gevedon v.Hotopp, 2d Dist. No. 20673,
*Page 120A mortgage is a form of secured debt where the obligation, evidenced by a note, is secured by the transfer of an interest in property, accomplished by the delivery of a mortgage deed. Upon breach of condition of the mortgage agreement, a mortgagee has concurrent remedies. It may, at its option, sue in equity to foreclose, or sue at law directly on the note; or, bring an action in ejectment, Equity Savings Loan v. Mercurio (1937), 24 Ohio Law. Abs. 1, 2 [7 Ohio Op. 540]. Thus, suit on the note was not foreclosed by the disposition of the previous action in foreclosure * * *.
The Broadview S. L. Co. v. Crow (Dec. 30, 1982), 8th Dist. Nos. 44690, 44691 and 45002,
{¶ 17} Other jurisdictions have held similarly. "`[T]he general rule, in the absence of a statute to the contrary, is that a creditor whose debt is secured by mortgage may pursue his remedy in personam for the debt, or his remedy in rem to subject the mortgaged property to its payment'" (Footnotes omitted.) Szego v. Anyanwutaku
(D.C.App. 1994),
The treatise goes on to state: In short, the case of a mortgage or deed of trust is an exception to the general doctrine that a party shall not be allowed to sue at law and in equity for the same debt, and a mortgagee or holder of a deed of trust may ordinarily pursue all his remedies at once or concurrently, although he is under no obligation to do so, or he may pursue them successively.
Id. at fn. 3. The Second District Court of Appeals for Illinois has stated:
Because a mortgage and an accompanying promissory note securing the mortgage constitute separate contracts, they give rise to legally distinct remedies that cannot be pursued in a single-count foreclosure suit. * * * [A] mortgage foreclosure expressly has been held not to bar a subsequent suit on a guaranty. * * * [A] judgment of foreclosure [does] not adjudicate the defendant's rights and liabilities under a guaranty contract, and, therefore, the doctrine of res judicata [does] not apply.
(Citations omitted.) LP XXVI, L.L.C. v. Goldstein
(2004),
{¶ 18} Based on the above reasoning, Fifth Third Bank was free to pursue, at its option, a suit in equity to foreclose or a suit in law directly on the notes. Because Fifth Third Bank and Andrew and Donielle Hopkins were co-parties rather than adversaries in the Portage County case, Fifth Third Bank was not required to file a cross-claim in that case. While the decision out of Portage County barred Fifth Third Bank's claims regarding any interest it may have had in the real estate, it did not bar Fifth Third Bank's right to pursue money damages at law on the notes as separate and distinct contractual obligations. Accordingly, the trial court did not err by finding that Fifth Third Bank's claims for money damages were not barred by the doctrine of res judicata and by entering judgment in favor of Fifth Third Bank. Mr. and Mrs. Hopkins' assignment of error is overruled. *Page 121
Judgment affirmed.
SLABY and MOORE, JJ., concur.
CARR, P.J., concurs separately.
LP XXVI, LLC v. Goldstein , 285 Ill. Dec. 45 ( 2004 )
Huntington Natl. Bank v. Ross , 130 Ohio App. 3d 687 ( 1998 )
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