Franchas Holdings, L.L.C. v. Dameron , 2016 Ohio 878 ( 2016 )

[Cite as Franchas Holdings, L.L.C. v. Dameron, 2016-Ohio-878.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
CLERMONT COUNTY
FRANCHAS HOLDINGS, LLC, :
CASE NO. CA2015-09-073
Plaintiff-Appellant, :
OPINION
: 3/7/2016
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:
ROBERT DAMERON, as Executor of :
Estate of RUSSELL F. YOUNG II,
DECEASED, :
Defendant-Appellee. :
CIVIL APPEAL FROM CLERMONT COUNTY COURT OF COMMON PLEAS
Case No. 2014-CVH-1266
Shade Law Group, LLC, Kenneth R. Craycraft, Jr., 5181 Natorp Boulevard, Suite 110,
Mason, Ohio 45040, for plaintiff-appellant
William G. Massa, 431 Ohio Pike, Suite 216 North, Cincinnati, Ohio 45255, for defendant-
appellee
S. POWELL, J.
{¶ 1} Plaintiff-appellant, Franchas Holdings, LLC, appeals from the decision of the
Clermont County Court of Common Pleas granting summary judgment to defendant-
appellee, Robert Dameron, the executor of the estate of Russell F. Young, II. For the
reasons outlined below, we affirm.
Clermont CA2015-09-073
{¶ 2} On February 2, 2007, Young purchased eight condominium units in the Yacht
Harbor Village located in Palm Coast, Flagler County, Florida. As a result of this purchase,
Young became a member of the Yacht Harbor Village Condominium Association
("Association") subject to the Association's Declaration of Covenants and Restrictions
("Declaration"). As part of the Declaration, Young was required to pay assessments and
other charges for his eight condominium units to the Association. The Association later
assigned its right to collect upon any unpaid assessments regarding Young's eight
condominium units to Franchas Holdings, a real estate holding company based in Florida.
{¶ 3} On August 30, 2012, Franchas Holdings filed a complaint in foreclosure with the
Circuit Court, Seventh Judicial Circuit, in and for Flagler County, Florida ("Florida Circuit
Court"), seeking to collect upon the unpaid assessments attributed to Young's eight
condominium units. As permitted by Fla. Stat. 718.116(6)(a), the complaint sought to both
(1) foreclose on the assessment lien "in the manner a mortgage of real property is
foreclosed" and also (2) recover a money judgment. Young, however, never appeared in the
action.
{¶ 4} On August 29, 2013, the Florida Circuit Court entered a default judgment
against Young in the amount of $442,272.13, plus interest. Conditioned on Young's failure to
pay off the total amount then due and owing, the Florida Circuit Court then scheduled a
public sale of Young's eight condominium units for October 4, 2013. Thereafter, when Young
failed to pay off the money judgment rendered against him, Franchas Holdings foreclosed on
the property and purchased all eight of Young's condominium units at the public sale for a
total of $100. A certificate of title evidencing Franchas Holdings' purchase was then filed with
the Florida Circuit Court on October 31, 2013. Young subsequently passed away on
February 7, 2014, thus prompting Dameron to be named executor of his estate.
{¶ 5} On June 16, 2014, Franchas Holdings filed a certified copy of the Florida Circuit
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Court's default judgment against Young with the Hamilton County, Ohio Clerk of Courts.
Subsequently, on July 31, 2014, Franchas Holdings filed a notice with the Clermont County
Probate Court asserting a claim against Young's estate for $442,272.13, the full amount of
the money judgment previously issued by the Florida Circuit Court. Dameron, however,
rejected Franchas Holdings' claim by finding "the claimant has security for the above
Judgement against Russell F. Young II, and the ability to enforce payment, separate and
apart from the assets of the Clermont County, Ohio estate." On September 19, 2014,
Franchas Holdings filed a complaint with the trial court seeking to enforce its claim against
Young's estate, to which Dameron responded by timely filing an answer generally denying
Franchas Holdings' allegations.
{¶ 6} On March 15, 2015, Dameron filed a motion for summary judgment with the trial
court asserting that "a Florida court would not enforce this judgment; therefore, an Ohio court
can not (sic) either." In support of this claim, Dameron alleged Franchas Holdings was
improperly attempting to collect on a "pre-foreclosure sale judgment rendered in Florida" and
"not a deficiency judgment." According to Dameron, a "Florida court would not enforce the
Judgment presented by [Franchas Holdings] in the case at bar, but would require that a
deficiency judgment be rendered, and then enforce that deficiency judgment." In response,
Franchas Holdings claimed its money judgment was fully enforceable as it was a "self-
executing money judgment" that Young failed to defend against in the Florida Circuit Court
prior to his death.
{¶ 7} On May 14, 2015, Franchas Holdings supplemented its response to Dameron's
motion for summary judgment with documents from a similar lawsuit it had brought against
Young's son, Jeffrey R. Young. In that case, just as in its case against Young, Franchas
Holdings filed a complaint in foreclosure with the Florida Circuit Court seeking to recover
upon unpaid assessments attributed to a single condominium unit located within the Yacht
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Harbor Village owned by Jeffrey. When Jeffrey did not appear in the action, the Florida
Circuit Court issued a default judgment against Jeffrey in the amount of $49,733.44.
Thereafter, when Jeffry failed to pay off the judgment debt, Franchas Holdings foreclosed on
the property and purchased Jeffrey's single condominium unit at a public sale. A certificate
of title was then filed evidencing Franchas Holdings' purchase. Jeffrey later filed a motion for
clarification, or in the alternative, relief from the default judgment levied against him, which
the Florida Circuit Court denied "finding that the time bars in 1.540, Florida Rules of Civil
Procedure, have run and further finding the Court is without jurisdiction to grant the requested
relief."
{¶ 8} On August 10, 2015, the trial court issued its decision granting Dameron's
motion for summary judgment finding "the judgment sought to be enforced in this State as it
is now being sought would not be enforceable in Florida under the same circumstances." In
so holding, the trial court determined that because Franchas Holdings had foreclosed on the
property and subsequently purchased Young's eight condominium units at a public sale,
Florida law required Franchas Holdings to obtain a deficiency judgment to determine the
amount of set-off from the public sale before it could collect on the money judgment.
{¶ 9} The trial court also determined that Franchas Holdings' reliance on the Florida
Circuit Court's decision in regards to the default judgment against Young's son, Jeffrey, was
misplaced. As the trial court stated:
[Jeffrey's] motion was for "Clarification of Amended Default Final
Judgment or Alternatively for Relief from Amended Default Final
Judgment." It did not question the enforceability of the * * *
judgment against [him]. The motion was denied based on the
Florida court's finding that it was time-barred and further that the
court was without jurisdiction to grant the relief requested. The
Order does not establish that the judgment is fully enforceable in
Florida. This Court cannot find that the order in [Jeffrey's] case
raises a genuine issue of any triable fact in this case.
{¶ 10} Franchas Holdings now appeals from the trial court's decision, raising two
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assignments of error for review. For ease of discussion, Franchas Holdings' two
assignments of error will be addressed together.
{¶ 11} Assignment of Error No. 1:
{¶ 12} THE TRIAL COURT ERRED BY FAILING TO GIVE THE JUDGMENT THE
SAME EFFECT AS IT WOULD HAVE HAD IN THE RENDERING STATE.
{¶ 13} Assignment of Error No. 2:
{¶ 14} THE TRIAL COURT ERRED IN ITS INTERPRETATION AND APPLICATION
OF FLORIDA LAW.
{¶ 15} In its two assignments of error, Franchas Holdings argues the trial court erred
by granting summary judgment to Dameron, the executor of Young's estate, arguing the trial
court erred and misinterpreted Florida law by finding the Florida Circuit Court's default
judgment was not yet enforceable, thereby preventing it from collecting the full amount on its
money judgment from Young's estate. We disagree.
{¶ 16} Summary judgment is a procedural device used to terminate litigation when
there are no issues in a case requiring a formal trial. Roberts v. RMB Ents., Inc., 197 Ohio
App.3d 435, 2011-Ohio-6223, ¶ 6 (12th Dist.). On appeal, a trial court's decision granting
summary judgment is reviewed de novo. Moody v. Pilot Travel Ctrs., L.L.C., 12th Dist. Butler
No. CA2011-07-141, 2012-Ohio-1478, ¶ 7, citing Burgess v. Tackas, 125 Ohio App. 3d 294,
296 (8th Dist.1998). In applying the de novo standard, the appellate court is required to
"'us[e] the same standard that the trial court should have used, and * * * examine the
evidence to determine whether as a matter of law no genuine issues exist for trial.'" Bravard
v. Curran, 155 Ohio App. 3d 713, 2004-Ohio-181, ¶ 9 (12th Dist.), quoting Brewer v.
Cleveland Bd. of Edn., 122 Ohio App. 3d 378, 383 (8th Dist.1997).
{¶ 17} Pursuant to Civ.R. 56, a trial court may grant summary judgment only when (1)
there is no genuine issue of any material fact, (2) the moving party is entitled to judgment as
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a matter of law, and (3) the evidence submitted can only lead reasonable minds to a
conclusion that is adverse to the nonmoving party. BAC Home Loans Servicing, L.P. v.
Kolenich, 194 Ohio App. 3d 777, 2011-Ohio-3345, ¶ 17 (12th Dist.). The party moving for
summary judgment bears the initial burden of demonstrating that no genuine issue of
material fact exists. Touhey v. Ed's Tree & Turf, L.L.C., 194 Ohio App. 3d 800, 2011-Ohio-
3432, ¶ 7 (12th Dist.), citing Dresher v. Burt, 75 Ohio St. 3d 280, 292-293 (1996). Once this
burden is met, the nonmoving party must then present evidence to show that there is some
issue of material fact yet remaining for the trial court to resolve. Smedley v. Discount Drug
Mart, Inc., 190 Ohio App. 3d 684, 2010-Ohio-5665, ¶ 11 (12th Dist.). In determining whether
a genuine issue of material fact exists, the evidence must be construed in the nonmoving
party's favor. Walters v. Middletown Properties Co., 12th Dist. Butler No. CA2001-10-249,
2002-Ohio-3730, ¶ 10.
{¶ 18} Pursuant to the Full Faith and Credit Clause of Section 1, Article IV, United
States Constitution, Ohio courts must recognize the validity of a foreign judgment rendered
by a court of competent jurisdiction. Wood v. Fliehman, 193 Ohio App. 3d 454, 2011-Ohio-
2101, ¶ 9 (12th Dist.). In other words, "Ohio courts must give the judicial proceedings of
another state the same faith and credit as they have by law or usage in the courts of such
state from which they are taken." Bishopp v. Dryvit Sys., Inc., 12th Dist. Warren No.
CA2006-05-063, 2007-Ohio-917, ¶ 13. Thus, as it relates to the facts of this case, Ohio
courts must give the same credit to the Florida proceedings at issue here that those
proceedings would carry in Florida's own courts. See Holzemer v. Urbanski, 86 Ohio St. 3d
129, 132 (1999), citing Durfee v. Duke, 375 U.S. 106, 109, 84 S. Ct. 242 (1963).
{¶ 19} Pursuant to Fla. Stat. 718.116(6)(a), in order to recover the unpaid
assessments attributed to Young's eight condominium units, Franchas Holdings was
permitted to, and in fact did, bring an action to both (1) foreclose upon the assessment liens
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"in the manner a mortgage of real property is foreclosed" and also (2) recover a money
judgment. See Garcia v. Stewart, 906 So. 2d 1117, 1122 (Fla. 4th DCA 2005). However, it is
well-established that a creditor can recover only up to the amount owed by the debtor
"whether that is accomplished through a sale of the mortgaged property, a judgment, or
some combination of the two." Kinney v. Countrywide Home Loans Servicing, L.P., 165
So. 3d 691, 693 (Fla. 4th DCA 2015). Therefore, in reviewing Florida law regarding how a
mortgage of real property is foreclosed, "when a lender has sued to foreclose a mortgage, its
legal remedy on a promissory note is a deficiency judgment—a judgment 'for the balance of
the indebtedness after applying the proceeds of a sale of the mortgaged property to such
indebtedness.'" Id., quoting Commercial Bank of Ocala v. First Nat. Bank, 80 Fla. 685, 87
So. 315, 316 (1920).
{¶ 20} In this case, however, the record firmly establishes that Franchas Holdings
never moved the Florida Circuit Court for a deficiency judgment after it foreclosed on the
property "in the manner a mortgage of real property is foreclosed" as provided by Fla. Stat.
718.116(6)(a). As noted by the Florida Second District Court of Appeals in Century Group,
Inc. v. Premier Financial Services East, L.P., 724 So. 2d 661 (Fla. 2d DCA 1999):
It is axiomatic that a party can only recover once on the same
debt. Thus, if Premier had pursued execution of the money
judgment and recovered the entire judgment amount, then it
could not pursue execution of the foreclosure judgment. If
Premier pursued foreclosure, and the sale amounts satisfied the
judgment, then Premier could not pursue its judgment on the
note. Complications arise, however, if the proceeds resulting
from the initial collection method, execution on the note or
foreclosure, do not satisfy the entire debt. In that circumstance,
a party is required to pursue another method of collection to
obtain the entire amount of the judgment.
(Emphasis added.) Id. at 662.
{¶ 21} Thus, to avoid the possibility of a double recovery, once Franchas Holdings
foreclosed on Young's eight condominium units, our review of applicable Florida law indicates
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Franchas Holdings was required to seek a deficiency judgment to determine the amount of
indebtedness that was still due and owing, if any. See Hammond v. Kingsley Asset
Management, LLC, 144 So. 3d 673, 675-676 (Fla. 2d DCA 2014); see also Flagship Bank v.
Bryan, 384 So. 2d 1323, 1324, fn. 3 (Fla. 5th DCA 1980) ("indebtedness can be collected only
once, and any payment on any of the judgments must be credited to the others"). Again, the
record is clear that Franchas Holdings never moved the Florida Circuit Court for a deficiency
judgment after it foreclosed on the property, thereby making a full recovery from Young's
estate for the entire amount due on the money judgment it received from the Florida Circuit
Court improper as this case currently stands.
{¶ 22} Nevertheless, Franchas Holdings argues it should be entitled to collect on the
full amount of its money judgment from Young's estate since the Florida Circuit Court denied
similar claims regarding Young's son, Jeffrey. However, after a thorough review of the
record, we find the facts in that case distinguishable from the case at bar for not only did the
Florida Circuit Court merely deny Jeffrey's motion on procedural grounds by "finding that the
time bars in 1.540, Florida Rules of Civil Procedure, have run and further finding the Court is
without jurisdiction to grant the requested relief," there is also no indication in the record that
Franchas Holdings was attempting to collect the full amount of its money judgment rendered
against him after it foreclosed on the property and purchased his single condominium unit at
the public sale. Therefore, based on the facts and circumstances here, we find no merit to
Franchas Holdings' argument as it relates to the Florida Circuit Court's holding in Jeffrey's
case.
{¶ 23} In light of the foregoing, we find no error in the trial court's decision finding
Franchas Holdings was not entitled to recover the full amount of its money judgment
rendered against Young from Young's estate after it foreclosed on the property and
purchased Young's eight condominium units at the public sale without first obtaining a
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deficiency judgment. Therefore, we find no error in the trial court's decision granting
summary judgment to Dameron, the executor of Young's estate. Accordingly, Franchas
Holdings' two assignment of error are overruled.
{¶ 24} Judgment affirmed.
M. POWELL, P.J., and HENDRICKSON, J., concur.
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