GMAC Mtge., L.L.C. v. Blazetic , 2014 Ohio 5617 ( 2014 )

[Cite as GMAC Mtge., L.L.C. v. Blazetic, 2014-Ohio-5617.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
LAKE COUNTY, OHIO
GMAC MORTGAGE, LLC, SUCCESSOR : OPINION
BY MERGER TO GMAC MORTGAGE
CORPORATION, :
CASE NO. 2014-L-066
Plaintiff-Appellee, :
- vs - :
DAVID G. BLAZETIC, et al., :
Defendant-Appellant. :
Civil Appeal from the Lake County Court of Common Pleas, Case No. 09 CF 000872.
Judgment: Affirmed.
Adam R. Fogelman, Lerner, Sampson & Rothfuss, L.P.A., 120 East Fourth Street, 8th
Floor, P.O. Box 5480, Cincinnati, OH 45201-5480 (For Plaintiff-Appellee).
David N. Patterson, 33579 Euclid Avenue, Willoughby, OH 44094-3199 (For
Defendant-Appellant).
CYNTHIA WESTCOTT RICE, J.
{¶1} Appellant, David G. Blazetic, appeals from the judgment of the Lake
County Court of Common Pleas denying his motion for relief from the trial court’s entry
of judgment, filed pursuant to Civ.R 60(B). For the reasons discussed in this opinion,
we affirm the trial court.
{¶2} On April 18, 1999, appellant executed a note in favor of Charter One
Mortgage Corp. in the amount of $144,500. The note was secured by a mortgage
executed on the same date to Charter One Mortgage Corp. The mortgage encumbered
real property formerly owned by appellant, located at 9860 Weathersfield Dr., Concord
Township, Ohio 44060. It was properly recorded in the Lake County Recorder’s Office.
Charter One Mortgage Corp. subsequently assigned the note and mortgage to GMAC
Mortgage Corporation. When GMAC Mortgage Corporation merged with appellee,
appellee became the holder of the note and mortgage.
{¶3} On January 11, 2007, after appellant defaulted in his payments, appellee
filed a complaint in foreclosure. In September 2007, appellant executed a loan
modification agreement, modifying the original note. As a result, the parties filed a joint
voluntary dismissal of the action. Appellant, however, again defaulted on the modified
loan agreement. In July 2008, appellee filed its second complaint in foreclosure. The
defaulted loan, however, was reinstated and appellee voluntarily dismissed the second
action.
{¶4} In March 2009, after a third default, appellee filed its third complaint in
foreclosure. Service was perfected, but appellant neither filed an answer nor otherwise
made an appearance. As a result, in May 2009, appellee filed a motion for default
judgment. On June 30, 2009, the trial court granted the motion for default judgment and
entered judgment in appellee’s favor on its complaint in foreclosure. The property was
appraised and an order of sale was issued. Prior to the sale, appellant filed a notice of
bankruptcy, pursuant to Title 7 of the United States Code, and the trial court filed a
judgment withdrawing the order of sale. The matter was stayed pending the resolution
of appellant’s bankruptcy.
{¶5} In January 2013, the stay was terminated. The property was reappraised
and a new order of sale was issued. In September 2013, however, appellant filed
2
another notice of bankruptcy, pursuant to Chapter 13 of the United States Code. The
trial court again entered a stay pending the resolution of the bankruptcy matter. After
the United States Bankruptcy Court dismissed appellant’s Chapter 13 proceeding,
appellee moved the court to reactivate the underlying proceeding. The court granted
the motion and a third order for sale was issued.
{¶6} In March 2014, appellant filed a motion to set aside the trial court’s order
granting appellee default judgment issued on June 30, 2009. Appellant argued he was
entitled to relief from judgment pursuant to Civ.R. 60(B)(4) and/or (5). As a basis,
appellant maintained the note was not properly assigned to appellee and, thus, he
possessed a meritorious defense. Appellant further argued the judgment was unjust
because, pursuant to Civ.R. 41(A), appellee’s third complaint was barred by the double-
dismissal rule. He also claimed he should be granted relief because he did not receive
notice of the hearing on appellee’s motion for default judgment. Finally, appellant
asserted he should be granted relief from the default judgment because, if analyzed
under a Civ.R. 56 standard, there were genuine issues of material fact that should be
litigated on the merits of appellee’s complaint.
{¶7} In its memorandum in opposition, appellee argued appellant’s motion was
neither timely, nor was the purported defense he asserted meritorious. Appellee further
argued its third complaint was not barred by the double-dismissal rule because the
original dismissal was entered pursuant to a mortgage modification agreement which
changed the terms of the original contract. Consequently, appellee asserted, the
second and third complaints were premised upon a different agreement than the first
complaint. Appellee additionally noted that appellant was properly served with notice of
its motion for default judgment, but voluntarily elected to do nothing.
3
{¶8} On May 14, 2014, the magistrate denied appellant’s motion for relief from
judgment. The magistrate, inter alia, determined appellant’s motion failed to set forth
sufficient operative facts to establish he possessed a meritorious defense to the third
complaint. Moreover, the magistrate reasoned that appellant failed to adequately
address why it took him nearly five years to file his motion for relief. Thus, the
magistrate concluded, the motion was untimely.
{¶9} Appellant filed timely objections to the decision. And, on June 16, 2014,
finding no error of law or other defect, the trial court adopted the magistrate’s decision in
its entirety. Appellant now appeals and assigns three errors for this court’s review.
{¶10} Before addressing appellant’s assignments of error, we first point out that
appellant, in his brief, fails to address the specific stated basis underlying the trial
court’s denial of his motion for relief from judgment; namely, that he failed to provide
sufficient justification for the near-five-year delay in filing the motion. The Ohio Supreme
Court has held:
{¶11} To prevail on a motion brought under Civ.R. 60(B), the movant
must demonstrate that: (1) the party has a meritorious defense or
claim to present if relief is granted; (2) the party is entitled to relief
under one of the grounds stated in Civ.R. 60(B)(1) through (5); and
(3) the motion is made within a reasonable time, and, where the
grounds of relief are Civ.R. 60(B)(1), (2) or (3), not more than one
year after the judgment, order or proceeding was entered or taken.
GTE Automatic Elec. Inc. v. ARC Industries, Inc, 47 Ohio St. 2d 146
(1976), paragraph two of the syllabus.
4
{¶12} “If any one of the aforementioned requirements is not satisfied, the motion
is properly overruled.” Sokol v. HMDG, LLC, 11th Dist. Geauga No. 2012-G-3117, 2013-
Ohio-3476, ¶13.
{¶13} The magistrate’s decision, adopted by the trial court, found appellant did
not file his motion within a reasonable time. In effect, the court concluded that
requirement was not satisfied. Appellant, on appeal, does not specifically address this
determination. Appellant’s failure to contest the foundation of the trial court’s judgment
is sufficient basis for affirming the lower court’s ruling. In the interest of a
comprehensive analysis, however, we shall consider the merits of appellant’s assigned
errors. His first assignment of error asserts:
{¶14} “The trial court erred to the prejudice of the appellant by entering judgment
in favor of the appellee and denying the motion to set aside as the decree of foreclosure
is void pursuant to Civil Rule 41, Revised Code Section 2305.19, and the legal doctrine
of res judicata.”
{¶15} Appellant asserts the trial court erred in failing to grant his Civ.R. 60(B)
motion because appellee’s third complaint was barred by the doctrine of res judicata
pursuant to the double-dismissal rule. Appellant asserts each of the complaints were
premised upon the same nucleus of operative facts and therefore the third complaint
was a nullity. We do not agree.
{¶16} The double dismissal rule is set forth in Civ.R. 41(A)(1). It provides:
{¶17} Subject to the provisions of Civ.R. 23(E), Civ.R. 23.1, and Civ.R.
66, a plaintiff, without order of court, may dismiss all claims
asserted by that plaintiff against a defendant by doing either of the
following:
5
{¶18} (a) filing a notice of dismissal at any time before the
commencement of trial unless a counterclaim which cannot remain
pending for independent adjudication by the court has been served
by that defendant;
{¶19} (b) filing a stipulation of dismissal signed by all parties who have
appeared in the action. Unless otherwise stated in the notice of
dismissal or stipulation, the dismissal is without prejudice, except
that a notice of dismissal operates as an adjudication upon the
merits of any claim that the plaintiff has once dismissed in any
court. (Emphasis added.)
{¶20} The Supreme Court of Ohio has discussed the application of the double-
dismissal rule to foreclosure actions. In U.S. Bank Natl. Assn. v. Gullotta, 120 Ohio
St.3d 399, 2008-Ohio-6268, the Court observed:
{¶21} Civ.R. 41(A) would not apply to bar a third claim if the third claim
were different from the dismissed claims. As the court in
EMC[Mtge. Corp. v. Jenkins, 164 Ohio App. 3d 240, 2005-Ohio-
5799 (10th Dist.)] pointed out, there are examples from Ohio courts
where successive foreclosure actions were indeed considered to be
different claims. In those cases, however, the underlying agreement
had significantly changed or the mortgage had been reinstated
following the earlier default. In Aames Capital Corp. v. Wells, 9th
Dist. Summit No. 20703, 2002-Ohio-1498, (Apr. 3, 2002), the
mortgagor argued that res judicata barred a second foreclosure
action on the same note and mortgage. In the first foreclosure
6
action, the trial court had ruled against the mortgagee and required
it to reinstate the note and mortgage. The mortgagee filed its
second foreclosure action when the mortgagor failed to make
payments on the reinstated note. The court in Aames held, “As the
bases for the two complaints were different, the present action is
not barred by res judicata.” Aames[, supra]. (Emphasis sic.)
Gullotta, supra, at ¶33.
{¶22} In the instant matter, appellee argued that the first complaint was
dismissed after the parties entered a loan modification agreement in which appellant
agreed to pay a principal balance different from the amount to which appellee claimed
entitlement. According to appellee, the mortgage was subsequently reinstated with
different terms. Appellee consequently maintained the modification of the loan
represented a different contractual obligation than the mortgage on which appellee
sought foreclosure in its initial complaint.
{¶23} At no point in the proceedings did appellant contest that the loan was
modified; moreover, appellant provided no argumentation to support a conclusion that
the modification did not change and reinstate the mortgage after his default. To the
extent there is nothing in the record to contradict appellee’s position, we agree with the
magistrate’s determination on this issue; to wit, that the second and third complaints
were premised upon different claims than the claim in the first action. Accordingly, the
double-dismissal rule was not implicated in this matter and the trial court did not err in
adopting the magistrate’s analysis of this point.
{¶24} Appellant’s first assignment of error lacks merit.
{¶25} Appellant’s second assignment of error provides:
7
{¶26} “The trial court erred to the prejudice of the appellant by entering judgment
in favor of the appellee and denying the motion to set aside as the appellee failed to
proffer competent, credible evidence to properly and sufficiently establish standing and
that it was the real party in interest.”
{¶27} Appellant asserts, under his second assigned error, that the trial court
erred in adopting the magistrate’s decision because there was insufficient evidence to
establish appellee had standing as a real party in interest. And, appellant contends,
appellee’s alleged lack of standing compromised the subject-matter jurisdiction of the
trial court. Appellant therefore maintains he was entitled to relief from judgment. We do
not agree.
{¶28} Recently, in Bank of America, N.A. v. Kuchta, ___ Ohio St.3d ___, 2014-
Ohio-4275, the Ohio Supreme Court held that, “[a]lthough standing is required in order
to invoke the jurisdiction of the court of common pleas over a particular action, lack of
standing does not affect the subject-matter jurisdiction of the court.” Id. at paragraph
three of the syllabus. Furthermore, the Court held, “[l]ack of standing is an issue that is
cognizable on appeal, and therefore it cannot be used to collaterally attack a judgment
in foreclosure.” Id. at paragraph two of the syllabus.
{¶29} In this matter, appellant conflates standing with subject-matter jurisdiction;
moreover, appellant attempted to collaterally attack the default judgment in foreclosure
by way of a motion for relief from judgment. Pursuant to Kuchta, appellant’s substantive
argument is misplaced and he utilized a non-cognizable means to challenge the
judgment in foreclosure. His position is therefore without merit.
{¶30} Appellant’s second assignment of error is not well taken.
{¶31} Appellant’s third assignment of error provides:
8
{¶32} “The trial court erred to the prejudice of the appellant by granting and
upholding the default judgment without providing proper, constitutional notice of hearing
and opportunity to the appellant to be heard and defend the matter.”
{¶33} Appellant asserts his motion for relief from judgment should have been
granted because he did not receive notice of the hearing. Appellant asserts, in a
conclusory fashion, that he made an appearance and thus he was entitled to notice of
the hearing on appellee’s motion for default judgment, pursuant to Civ.R. 55(A). We do
not agree.
{¶34} Civ.R. 55(A) provides, in relevant part: “If the party against whom
judgment by default is sought has appeared in the action, he (or, if appearing by
representative, his representative) shall be served with written notice of the application
for judgment at least seven days prior to the hearing on such application.” Appellant
contends, in his brief, that he was “in contact with the Appellee regarding the
foreclosure and resolution thereof, which triggers notice rights.” Appellant, however,
fails to identify the manner in which he was in contact with appellee and thus fails to
provide any specific basis for his contention that he “appeared in the action.”
{¶35} Ohio courts have liberally interpreted the concept of “appearance” vis-à-
vis Civ.R. 55(A). Accettola v. Big Sky Energy Inc., 11th Dist. Ashtabula No. 2012-A-
0049, 2014-Ohio-1340, ¶13. On one hand, courts have noted a party makes an
appearance when the party “clearly expresses to the opposing party an intention and
purpose to defend the suit, regardless of whether a formal filing is made.” Johnson v.
Romeo, 7th Dist. Mahoning No. 06 MA 4, 2006-Ohio-7073, ¶19; see also Rocha v.
Salsbury, 6th Dist. Fulton No. F-05-014, 2006-Ohio-2615, ¶20. Alternatively, some
courts have determined a party must “at least contact the court” in order to appear for
9
purposes of Civ.R. 55(A). Walton Constr. Co. v. Perry, 2d Dist. Montgomery No. 15707,
1996 Ohio App. LEXIS 4647, *4 (Oct. 25, 1996); see also Hicks v. Extended Family
Concepts, 5th Dist. Stark Nos. 2010CA00159 & 2010CA00183, 2011-Ohio-3227. In
Accettola, supra, this court found the latter conception more persuasive because “the
language of Civ.R. 55 suggests court involvement.” Id. at ¶13.
{¶36} In this case, there is no indication appellant met either conception of
“appearing” for Civ.R. 55(A) purposes. Nothing in the record suggests appellant either
(1) contacted the court at any time after appellee filed the complaint or (2) evinced some
intention to defend the suit. We therefore hold appellant was not entitled to notice
pursuant to Civ.R. 55(A).
{¶37} Appellant’s final assignment of error lacks merit.
{¶38} For the reasons discussed in this opinion, the judgment of the Lake
County Court of Common Pleas is affirmed.
THOMAS R. WRIGHT, J., concurs,
COLLEEN MARY O’TOOLE, J., concurs in judgment only.
10