Wiids Cove II, L.L.C. v. Williams , 2017 Ohio 9273 ( 2017 )

[Cite as Wiids Cove II, L.L.C. v. Williams, 2017-Ohio-9273.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 105377
WOODS COVE II, L.L.C.
PLAINTIFF-APPELLEE
vs.
TERRENCE WILLIAMS, ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-13-806369
BEFORE: Stewart, J., Keough, A.J., and E.T. Gallagher, J.
RELEASED AND JOURNALIZED: December 28, 2017
FOR APPELLANT
Terrence Williams, pro se
1675 Warrensville Center Road
South Euclid, OH 44121
ATTORNEYS FOR APPELLEE
For Woods Cove II, L.L.C. and Mountainside Realty Ventures, L.L.C.
David T. Brady
Andrew M. Tomko
Austin B. Barnes, III
Suzanne M. Godenswager
Brian Steven Gozelanczyk
Sandhu Law Group, L.L.C.
1213 Prospect Avenue, Suite 300
Cleveland, OH 44115
Also Listed:
Consumer Financial Protection Bureau
1700 G. Street, N.W.
Washington, D.C., 20552
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C., 20580
Ohio Bar Association
1700 Lake Shore Drive
Columbus, OH 43204
For United States of America
U.S. District Attorney Civil Process Clerk
801 West Superior Avenue
400 United States Courthouse
Cleveland, OH 44113
MELODY J. STEWART, J.:
{¶1} Defendant-appellant Terrence Williams appeals, pro se, from the trial court
order forfeiting real property to plaintiff-appellee Mountainside Realty Ventures, L.L.C.,
successor in interest to plaintiff Woods Cove II, L.L.C. We affirm the decision of the
trial court.
{¶2} At the outset of this litigation, Williams owned an interest in the property that
was subject to various claims by defendants who are not parties to this appeal. While the
case was pending in the trial court, Williams passed his interest in the property to his
mother, Geri Upton, who then conveyed half of that interest back to Williams such that,
as Williams states in his brief, each owned a one-half interest in the property.1 Upton
was not named in the initial complaint, and the docket does not indicate that she was ever
added as a party or entered an appearance in the case. Nevertheless, Mountainside,
Williams, and the trial court all refer to her as a codefendant.2
{¶3} There is little disagreement between the parties regarding the facts in this
case. Woods Cove purchased tax certificates relating to Williams’s property. It brought
this tax certificate foreclosure action against Williams claiming the amounts he owed on
the certificates were due and unpaid. Service was perfected, although Williams never
This court takes judicial notice that as recorded on March 13, 2015, Williams conveyed his
1
interest in the subject property to Upton via quit claim deed, and that as recorded on November 2,
2015, Upton conveyed 50 percent of that interest back to Williams.
Upton’s status does not impact our analysis and bears mention only for the sake of clarity.
2
answered the complaint or entered a formal appearance. Woods Cove filed an
unopposed motion for default judgment that the trial court granted. The court then
granted a decree of foreclosure.
{¶4} Woods Cove made numerous attempts to have the property sold by the county
sheriff. During the pendency of this case, Williams and Upton filed seven bankruptcies.
Some of these bankruptcy filings interrupted attempted sales of the property and caused
them to be withdrawn. Nevertheless, two sales attempts were completed. Because the
sales attempts were completed but the property remained unsold for want of a bidder,
pursuant to R.C. 5721.40, the court ordered that the property be forfeited to
Mountainside, the successor in interest to Woods Cove.
{¶5} Williams assigns two errors for our review: that the trial court erred in
disregarding Woods Cove’s purported violation of an automatic stay filed on November
4, 2016, and that the court erred by granting Woods Cove a decree of forfeiture in light of
the most recent bankruptcy filed. The assignments of error flow from the same premise:
that the most recent bankruptcy filed, Upton’s third within one year, created an automatic
stay of the proceedings before the trial court.
{¶6} The only question before this court is what effect, if any, Upton’s third
bankruptcy filing had on the underlying case. We resolve that the bankruptcy had no
effect on the proceedings and did not cause an automatic stay.
{¶7} R.C. 5721.40 directs a trial court to forfeit a tax certificate property, when the
property is twice offered for sale pursuant to R.C. 5721.39, but remains unsold for want
of a bidder. In those cases, the court is required to forfeit the property to the certificate
holder who filed the foreclosure request under R.C. 5721.37.
{¶8} In this case, on September 22, 2016, the court ordered the sheriff to sell the
subject property on November 7, 2016, and if unsuccessful, the court ordered that a
second attempt be made on November 21, 2016. The docket reflects that on November
21, the sheriff filed a return of sale indicating compliance with the order, and that the
property had not sold for want of a bidder. In light of these failed sales, on December
19, 2016, the court forfeited the property to Mountainside, the current holder of the tax
certificate. Thus, the trial court fully complied with R.C. 5721.40 and properly forfeited
the property.
{¶9} Williams argues that Upton’s third bankruptcy, filed with the bankruptcy
court on November 4, 2017, automatically stayed all proceedings, rendering the
subsequent attempted sales and ultimate forfeiture improper.
{¶10} 11 U.S.C. 362 provides a mechanism to automatically stay most actions
against a debtor when that person files a qualifying bankruptcy. See Adams v. Zarnel (In
re Zarnel), 619 F.3d 156, 163 (2d Cir.2010). There are, however, limitations to this
provision that apply to subsequent bankruptcies filed by the same person. Id. 11 U.S.C.
362(c)(4) states “‘if [two] or more * * * cases of the debtor were pending within the
previous year but were dismissed, * * * the stay * * * shall not go into effect upon the
filing of the later case,’ and the debtor may obtain a stay only if he is able to demonstrate
that the filing of the later case is in good faith.” Id. at 165, quoting 11 U.S.C. 362(c)(4).
{¶11} The trial court’s docket reflects that a notice of the November 4 bankruptcy
was filed on November 9. The filing was not attributed to any party nor was it signed.
It consisted entirely of a general notice from the bankruptcy court with boilerplate
language indicating that Upton filed a bankruptcy. Nowhere in that filing is an order
from the bankruptcy court to stay the proceedings or a request from either party to do so.
Williams does not dispute this, but instead bases his argument on an incorrect reading of
11 U.S.C. 362, the automatic stay provisions of the federal bankruptcy code. His
argument is simply that “[u]pon the filing of a bankruptcy, an automatic stay goes into
effect.”
{¶12} The trial court record reflects that Upton had two pending bankruptcies
within the previous year that were dismissed.3 As such, pursuant to 11 U.S.C. 362(c)(4),
there was no automatic stay applicable to the November 4 bankruptcy. As previously
noted, the November 9 filing was a general notice from the bankruptcy court indicating
that Upton filed a bankruptcy; it contained no indication that Upton demonstrated that this
third bankruptcy was filed in good faith or that the bankruptcy court determined as much.
In light of the exception to the automatic stay provision, we find that the trial court
committed no error.
{¶13} Judgment affirmed.
It is ordered that appellee recover of appellant costs herein taxed.
Bankruptcy case number 16-10808 was filed February 19, 2016, and dismissed April 8,
3
2016. Bankruptcy case number 16-12714 was filed May 16, 2016, and dismissed July 12, 2016.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the common
pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
______________________________________________
MELODY J. STEWART, JUDGE
KATHLEEN ANN KEOUGH, A.J., and
EILEEN T. GALLAGHER, J., CONCUR