Huntington v. Yeager , 2014 Ohio 4151 ( 2014 )

[Cite as Huntington v. Yeager, 2014-Ohio-4151.]
STATE OF OHIO, HARRISON COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
THE HUNTINGTON NATIONAL BANK )
SUCCESSOR BY MERGER TO SKY )
BANK, )
) CASE NO. 13 HA 7
PLAINTIFF, )
) OPINION
V. )
)
NATHAN M. YEAGER, ET AL., )
)
DEFENDANTS-APPELLEES. )
CHARACTER OF PROCEEDINGS: Civil Appeal from Court of Common
Pleas of Harrison County, Ohio
Case No. CVE-2012-0011
JUDGMENT: Affirmed
APPEARANCES:
For Plaintiff-Appellant Attorney Kristen S. Moore
Mariemont Properties Millennium Centre-Suite 300
200 Market Avenue North
Canton, Ohio 44701-4213
For Defendants-Appellees No brief filed
JUDGES:
Hon. Gene Donofrio
Hon. Joseph J. Vukovich
Hon. Cheryl L. Waite
Dated: September 19, 2014
[Cite as Huntington v. Yeager, 2014-Ohio-4151.]
DONOFRIO, J.
{¶1} Plaintiff-appellant, Mariemont Properties, appeals from a Harrison
County Common Pleas Court judgment denying its Motion to Amend Entry
Confirming Sale and Ordering Deed and Distribution, in which appellant requested
that the court distribute excess proceeds from the sale of certain property to it rather
than to the debtor alleging the debtor fraudulently increased the sale price by
“bidding up” the property.
{¶2} In 2010, Huntington National Bank commenced a foreclosure action
against defendants-appellees, Nathan Yeager and Jeremiah Yeager. The Yeagers’
property was foreclosed upon and ultimately went to a foreclosure sale on October
29, 2012.
{¶3} Van Oliver, appellant’s president, attended the foreclosure sale in
Harrison County. (Oliver Aff. ¶3). Initially, Oliver and two other bidders were
participating. (Oliver Aff. ¶4). One bidder dropped out when the price reached
$46,000. (Oliver Aff. ¶6). The other bidder and Oliver continued to bid. (Oliver Aff.
¶6). The other bidder’s last bid was $69,000. (Oliver Aff. ¶7). Oliver made the
winning bid of $70,000 on appellant’s behalf. (Oliver Aff. ¶7). Oliver later discovered
that the other bidder was actually Jeremy [sic.] Yeager, one of the property’s debtors.
(Oliver Aff. ¶9).
{¶4} After the debts and obligations were paid, excess proceeds of
$19,954.76 remained from the sale. Thus, $50,045.24 was required to pay off the
judgment, costs, and interest.
{¶5} The trial court issued an entry Confirming Sale and Ordering Deed on
March 4, 2013. Therein the court ordered the sheriff to retain the $19,954.76
“surplus” until further order.
{¶6} On June 3, 2013, the trial court issued a judgment entry stating that any
party could submit a request for the release of the surplus funds.
{¶7} On June 28, 2013, appellant filed a Motion to Amend Entry Confirming
Sale and Ordering Deed and Distribution. Appellant asserted that the “other bidder”
at the foreclosure sale was actually Jeremiah Yeager. It stated that Yeager bid on
-2-
the property up to $69,000 in order to inflate the sale price of the property. Appellees
did not file a response in opposition nor did they file a request for the surplus funds.
{¶8} The trial court overruled appellant’s motion. It stated that the
foreclosure statute required it to release the surplus to the clerk of courts, who in turn
was to notify the debtor. Following the statutory procedure, once the debtor
reimbursed the clerk for its costs, the clerk was to release the surplus funds to the
debtor. The court noted that appellant’s position, that the debtor in a foreclosure
should never be allowed to participate in the public sale, might be a valid concept.
But nothing in the Ohio Revised Code prohibits such action. It stated that the
Revised Code provides for a “public” auction and expressed that the court could not
pick and choose who could be permitted to participate in the auction. Therefore, the
court ordered the sheriff to release the surplus to the clerk of courts. It further
ordered the clerk of courts to follow the procedures set out in R.C. 2329.44 for
providing notice to the debtor.
{¶9} Appellant filed a timely notice of appeal on August 14, 2013. On
appellant’s request, the trial court stayed the distribution of the excess funds pending
this appeal.
{¶10} Appellee has failed to file a brief in this matter. Therefore, we may
consider appellant's statement of the facts and issues as correct and reverse the
judgment if appellant's brief reasonably appears to sustain that action. App.R. 18(C).
{¶11} Appellant raises a single assignment of error stating:
THE TRIAL COURT ERRED IN FAILING TO AMEND ITS
ENTRY CONFIRMING THE SALE AND ORDER THAT THE FUNDS
FRAUDULENTLY OBTAINED BY THE DEBTOR BE DISTRIBUTED
TO MARIEMONT PROPERTIES, INC.
{¶12} Appellant argues the trial court has authority to alter foreclosure sales
resulting from fraud or inequitable circumstances. It asserts the court can reject or
set aside a sale when “bidding irregularities” occur. Appellant contends that when a
-3-
property owner drives up the purchase price, this constitutes fraud and the court can
step in to cure the resulting inequity. Here, appellant asserts, Jeremiah Yeager was
not a bona fide bidder. Had he wanted to, and been able to afford to, Yeager could
have exercised his statutory right to redeem the property for approximately $50,000
at any time prior to the confirmation of sale.
{¶13} Appellant asks that we fashion an equitable remedy in this case. It
requests that we not permit the debtor to profit in this case from his actions in
fraudulently inflating the sale price. Appellant asks that we order the trial court to
amend its entry confirming sale to reflect a sale price of $50,045.24 and to direct the
sheriff to return the remaining $19,954.76 to appellant.
{¶14} In overruling appellant’s motion, the trial court relied on R.C. 2329.44,
which provides in part:
(A) On a sale made pursuant to this chapter, if the officer who
makes the sale receives from the sale more money than is necessary to
satisfy the writ of execution, with interest and costs, the officer who
made the sale shall deliver any balance remaining after satisfying the
writ of execution, with interest and costs, to the clerk of the court that
issued the writ of execution. The clerk then shall do one of the
following:
(1) If the balance is twenty-five dollars or more, send to the
judgment debtor whose property was the subject of the sale a notice
that indicates the amount of the balance, informs the judgment debtor
that he is entitled to receive the balance, and sets forth the procedure
that the judgment debtor is required to follow to obtain the balance. This
notice shall be sent to the judgment debtor at the address of the
judgment debtor in the caption on the judgment or at any different
address he may have provided, by certified mail, return receipt
requested, within ninety days after the sale. If the certified mail
envelope is returned with an endorsement showing failure or refusal of
-4-
delivery, the clerk immediately shall send the judgment debtor, at the
address of the judgment debtor in the caption on the judgment or any
different address he may have provided, a similar notice by ordinary
mail. If the ordinary mail envelope is returned for any reason, the clerk
immediately shall give a similar notice to the judgment debtor by an
advertisement in a newspaper published in and of general circulation in
the county, which advertisement shall run once a week for at least three
consecutive weeks.
***
(B)(1) Subject to division (B)(2) of this section, the clerk of the
court that issued the writ of execution, on demand and whether or not
the notice required by division (A)(1) or (2) of this section is provided as
prescribed, shall pay the balance to the judgment debtor or his legal
representatives.
{¶15} The trial court determined that this language was mandatory and
although it had “no intention of approving or justifying Jeremy [sic.] Yeager’s actions”
it was bound by the statute. Thus, the court’s ruling on appellant’s motion strictly
follows the statute’s requirements. The court ordered the sheriff to release the funds
to the clerk of courts, who, in turn, would give notice to the debtor to retrieve the
funds.
{¶16} The trial court is vested with “a certain discretion which may be utilized
in accepting or rejecting bids in land sale proceedings.” Union Savings Assoc. v.
Floyd Blackwell, Inc. and Wells, 9th Dist. Nos. 3083, 3084, 1981 WL 3828 (Jan. 14,
1981). In this case, the trial court followed the applicable and straight-forward
statutory procedure. It cannot be said that the trial court abused its discretion in
doing so. And while, like the trial court, we cannot agree with Yeager’s actions, there
is nothing in the statute that prohibited him from bidding at the foreclosure sale.
{¶17} Accordingly, appellant’s sole assignment of error is without merit.
{¶18} For the reasons stated above, the trial court’s judgment is hereby
-5-
affirmed.
Vukovich, J., concurs with attached concurring opinion.
Waite, J., concurs.
Vukovich J., concurs with attached concurring opinion:
{¶19} I concur with the decision of my colleagues, but write separately to
emphasize one point.
{¶20} Even if it a debtor can be considered to have acted fraudulently or
improperly by placing bids at the foreclosure sale in amounts more than the
redemption price that are not intended to be bona fide bids, there is no procedure for
a court (in the foreclosure action) to alter the monetary results of the sheriff’s sale.
Rather, the only Ohio law provided to this court on the matter of bidding irregularities
concerns setting aside the sale. As Mariemont was not interested in having the sale
set aside but asked for the court to provide it with surplus funds, the motion was
properly denied.