[Cite as Am. Savs. Bank v. Pertuset, 2014-Ohio-1290.]
IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT SCIOTO COUNTY
AMERICAN SAVINGS BANK, : FSB, et al., : : Plaintiff-Appellee, : Case No. 13CA3564 : vs. : : DECISION AND JUDGMENT CARL PERTUSET, et al., : ENTRY : Defendants-Appellants. : Released: 03/27/14 _____________________________________________________________ APPEARANCES:
Bruce M. Broyles, The Law Office of Bruce M. Broyles, Boardman, Ohio, for Appellants.
Jeffrey B. Sams, Pickerington, Ohio, and Joshua D. Howard, Portsmouth, Ohio, for Appellee, American Savings Bank.1 _____________________________________________________________
McFarland, J.
{¶1} This is an appeal from a Scioto County Common Pleas Court
summary judgment in favor of American Savings Bank, fsb (American) and
ASB Development Corp. (ASB), collectively referred to as “American,”
plaintiffs below and Appellees herein, on their foreclosure claims against
Carl E. Pertuset and Vera M. Pertuset, defendants below and appellants
herein. On appeal, Appellants contend that the trial court erred in granting
1 Farm Credit Services of Mid-America PCA has not filed a brief and is not participating on appeal. Scioto App. No. 13CA3564 2
Appellees’ renewed motion for summary judgment, which was granted after
the trial court vacated its original grant of summary judgment, which this
Court had previously affirmed on appeal, without a remand.
{¶2} In light of our determination that the trial court lacked
jurisdiction to vacate its original summary judgment grant and decree in
foreclosure in favor of American, we find that it exceeded its authority in
doing so. We must, therefore, reverse the trial court’s decision vacating
those prior orders as well as trial court’s order granting American’s renewed
motion for summary judgment. As such, we find, in accordance with our
prior decision rendered in American Savings Bank, fsb, et al. v. Carl E.
Pertuset, et al., 4th Dist. Scioto No. 11CA3442, 2013-Ohio-566, that the
original grant of summary judgment and decree in foreclosure stands valid
as the law of the case, as affirmed once already by this Court. Accordingly,
the referenced decisions of the trial court are reversed.
FACTS
{¶3} We initially set forth the facts, as already stated in or prior
decision regarding this matter.
“Between 2000 and 2008, appellants executed and
delivered three promissory notes to American and one
promissory note to ASB. Appellants also executed mortgages Scioto App. No. 13CA3564 3
on properties to secure the notes. Appellees commenced the
instant action on May 20, 2010 and alleged appellants were in
default on the notes and sought, inter alia, foreclosure of their
mortgage interests. Appellants answered, but their answer did
not address the merits of the claims. Rather, they requested a
dismissal of the case because the United States Bankruptcy
Court had discharged their debts. Later, the parties learned that
the bankruptcy proceedings had been dismissed, so the matter
proceeded accordingly.
Appellees eventually requested summary judgment and
argued that no genuine issues of material fact existed and they
were entitled to judgment as a matter of law. Appellees
supported their motion with an affidavit from Jack Stephenson,
Vice President of American and an employee of ASB, who
attested (1) to the amounts due and owing on the notes, (2) that
the instruments attached to the complaint as exhibits are true
and accurate copies, and (3) that his employers still hold the
notes. Appellants filed a ‘response’ and ‘notice of non
acceptance and notice of non consent’ and raised a number of
defenses. Scioto App. No. 13CA3564 4
Subsequently, the trial court granted the motion and
directed the appellees to submit an entry to the court. * * *”
American Savings Bank, fsb, et al. v. Carl E. Pertuset, et al., ¶
2-4.
{¶4} After the court filed a decree of foreclosure on August 9, 2011,
an initial direct appeal followed. Appellant’s initial appeal of this matter
alleged that the trial court had erred in granting summary judgment in favor
of American because American failed to conclusively establish they were
the proper party in interest and that they failed to establish privity with
Appellants. They also argued the trial court erred in granting summary
judgment in favor of American, claiming that American had failed to
conclusively establish the amount of their damages. While this matter was
initially pending on appeal, the property sold to third party buyers at a
sheriff’s sale held on November 14, 2012. This Court issued a decision on
the merits affirming the trial court’s grant of summary judgment and decree
in foreclosure on February 5, 2013.
{¶5} Subsequently, on February 28, 2013, American filed a motion to
vacate the trial court’s January 10, 2011, summary judgment grant as well as
its August 9, 2011, decree in foreclosure, based upon its concern regarding a
potential procedural issue regarding the filing of the final judicial report Scioto App. No. 13CA3564 5
being filed after the final judgment entry, rather than before, as required by
R.C. 2329.191. Appellants joined in this motion, but for different reasons,
claiming that the trial court lacked subject matter jurisdiction. The trial
court denied Appellants’ motion, but filed a judgment entry on March 4,
2013, granting American’s motion and vacating its own original grant of
summary judgment and decree in foreclosure, after this Court had already
affirmed both of the those decisions on direct appeal.
{¶6} After the trial court vacated these decisions, American filed a
renewed motion for summary judgment, and Appellants followed with
additional discovery requests, motions for extensions of time to conduct
discovery and a motion to compel discovery. Finally, on June 19, 2013,
over the objection of Appellants, the trial court once again granted summary
judgment in favor of American.2 The matter is now before us for a second
time, with Appellants once again claiming that the trial court erred in
granting summary judgment.
ASSIGNMENT OF ERROR
“I. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT.”
2 The trial court’s June 19, 2013, grant of summary judgment was not a final, appealable order as it did not also order foreclosure of the properties at issue. However, in light of our determination that the trial court lacked jurisdiction to issue this order to begin with, we find this issue to be inconsequential. Scioto App. No. 13CA3564 6
LEGAL ANALYSIS
{¶7} In their sole assignment of error, and much like in their first
appeal of this matter, Appellants contend that the trial court erred in granting
summary judgment in favor of American. In raising this assignment of
error, Appellants argue that American failed to satisfy the conditions
precedent to filing suit by failing to provide them notice of default and
notice of acceleration. Appellants also argue that American failed to comply
with discovery and as such, the trial court should not have granted summary
judgment. However, before we reach the merits of Appellants’ argument,
we must address a threshold procedural matter.
{¶8} As set forth above, the question of whether the trial court
properly granted summary judgment and a decree in foreclosure in favor of
American has already been before this Court on direct appeal. Further, as
we have noted, this Court has previously affirmed the trial court’s January
10, 2011, grant of summary judgment and August 9, 2011, decree in
foreclosure. American Savings Bank, fsb, et al. v. Carl E. Pertuset, et al.,
supra. Despite our affirmance on appeal without remand, the trial court, at
the request of the parties, vacated its summary judgment grant and decree in
foreclosure. Based upon the following, we conclude that the trial court
exceeded its authority in doing so and, as such, its actions were contrary to Scioto App. No. 13CA3564 7
the law of the case, as established in this Court’s prior decision regarding
this matter.
{¶9} In Nolan v. Nolan, 11 Ohio St.3d 1, 462 N.E.2d 410 (1984), the
Supreme Court of Ohio discussed the doctrine of the law of the case in
relation to a trial court’s failure to execute a remand mandate given by a
reviewing court. Specifically, Nolan involved a trial court’s complete
restructuring of a real estate settlement on remand, rather than limiting its
action on remand to making findings regarding the right of occupancy of the
marital home, as instructed by the reviewing court. Nolan at 2. In response,
the Supreme Court of Ohio held that “[a]bsent extraordinary circumstances,
such as an intervening decision by the Supreme Court, an inferior court has
no discretion to disregard the mandate of a superior court in a prior appeal in
the same case.” Nolan at syllabus (internal citations omitted). In reaching
its decision, the Nolan court discussed the law of the case doctrine as
follows:
“* * * the doctrine provides that the decision of a reviewing
court in a case remains the law of that case on the legal
questions involved for all subsequent proceedings in the case at
both the trial and reviewing levels.” Nolan at 3 (internal
citations omitted). Scioto App. No. 13CA3564 8
The Nolan court further noted that while the rule will not be applied to
achieve unjust results, the application of the rule is necessary “to ensure
consistency of results in a case” as well as “to avoid endless litigation by
settling the issues, and to preserve the structure of superior and inferior
courts as designed by the Ohio Constitution.” Id.; citing Gohman v. St.
Bernard, 111 Ohio St. 726, 730-731, 146 N.E. 291 (1924) (reversed on other
grounds) and State, ex rel. Potain v. Mathews, 59 Ohio St.2d 29, 32, 391
N.E.2d 343 (1979).
{¶10} We find the reasoning set forth in Nolan with respect to the
doctrine of the law of the case to be applicable to the matter presently before
us, where the trial court vacated two orders previously affirmed by this
Court on appeal. In fact, we find this doctrine even more compelling
considering the trial court vacated these orders absent a remand from this
Court. Simply put, absent a remand from this Court after a decision on the
merits, the trial court lacked jurisdiction to vacate its own orders.
{¶11} In reaching this result, we rely on the reasoning set forth not
only in Nolan v. Nolan, supra, but also our prior reasoning in State of Ohio,
ex rel. Jim Petro v. Marshall, 4th Dist. Scioto No. 05CA3004, 2006-Ohio-
5357. In that case, the trial court granted a Civ.R. 60(B) motion to vacate a
judgment filed by Adrian Rawlins and then granted Rawlins judicial release Scioto App. No. 13CA3564 9
from prison, despite the fact that this Court had previously affirmed
Rawlins’ conviction and sentence on appeal, without a remand. Id. at ¶ 4.
As a result of the trial court’s actions, the Attorney General filed a complaint
for a writ of prohibition, alleging that the trial court lacked jurisdiction to
vacate Rawlins’ conviction. Id. at ¶ 1. This Court granted the writ,
reasoning that “Judge Marshall patently and unambiguously lacked
jurisdiction to entertain the motion after this court had expressly ruled on the
same issues the motion presented.” Id. In reaching our decision, we
reasoned as follows:
“Civ.R. 60(B) clearly gives the trial court jurisdiction to grant
relief from a final judgment. However, once a party undertakes
an appeal and absent a remand, the trial court is divested of
jurisdiction to take any action that is inconsistent with the
appellate court's exercise of jurisdiction. Post v. Post (1990), 66
Ohio App.3d 765, 769, 586 N.E.2d 185; State ex rel. Special
Prosecutors, supra, at 97, 378 N.E.2d 162.” Id. at ¶ 27.
{¶12} As we discussed in State, ex rel. Petro v. Marshall, the Special
Prosecutors case involved a trial court’s subsequent grant of a motion to
withdraw a guilty plea when the defendant “lost the appeal of a conviction Scioto App. No. 13CA3564 10
based upon the guilty plea.” Id. at ¶ 28. We noted that in Special
Prosecutors, the Supreme Court reasoned that
“allowing the trial court to consider a Crim.R. 32.1 motion to
withdraw a guilty plea subsequent to an appeal and affirmance
by the appellate court ‘would affect the decision of the
reviewing court, which is not within the power of the trial court
to do.’ ” Id. at ¶ 29; citing Special Prosecutors at 97-98.
{¶13} Although both State, ex rel. Petro v. Marshall and Special
Prosecutors both involved underlying criminal matters, we noted in State, ex
rel. Petro v. Marshall at ¶ 30 that the Supreme Court of Ohio has made a
similar rule concerning Civ.R. 60(B) motions. Specifically, we noted as
“* * * absent a remand from the appellate court, ‘an appeal
divests trial courts of jurisdiction to consider Civ.R. 60(B)
motions for relief from judgment.’ See Howard v. Catholic
Social Servs. of Cuyahoga Cty., Inc., 70 Ohio St.3d 141, 147,
637 N.E.2d 890, 1994-Ohio-219, 637 N.E.3d 890, citing State,
ex rel. East Mfg. Corp. v. Ohio Civ. Rights Comm. (1992), 63
Ohio St.3d 179, 181, 586 N.E.2d 105. See, also, Post, supra, at
770, 586 N.E.2d 185. Once a case has been appealed, ‘the trial Scioto App. No. 13CA3564 11
court is divested of jurisdiction except “over issues not
inconsistent with that of the appellate court to review, affirm,
modify or reverse the appealed judgment, such as the collateral
issue like contempt * * *.” ’ State ex rel. State Fire Marshall v.
Curl, 87 Ohio St.3d 568, 570, 2000-Ohio-248, [722] N.E.2d 73,
quoting Special Prosecutors at 97, 378 N.E.2d 162. Where an
appellate court has already ruled on an issue in a direct appeal,
a trial court's ‘reconsideration’ of that same issue is inconsistent
with the appellate court's exercise of jurisdiction and the
doctrine of the law of the case. See, Hopkins v. Dyer, 104 Ohio
St.3d 461, 2004-Ohio-6769, 820 N.E.2d 329, at ¶ 15.” Id.
{¶14} Here, Appellants brought an initial direct appeal of the trial
court’s original grant of summary judgment and decree in foreclosure in
favor of American. We affirmed the trial court’s original grant of summary
judgment and decree in foreclosure without remand. Subsequent to the
issuance of our decision, the trial court vacated its own summary judgment
and foreclosure decisions, based upon a claim by one of the parties that there
was a potential procedural issue related to a late filing of the final judicial
report. We note at this juncture that this potential procedural issue should Scioto App. No. 13CA3564 12
have been apparent to the parties at the time of the original appeal and yet no
error was raised related to it.
{¶15} As noted in State v. Fischer, 128 Ohio St.3d 92, 2010-Ohio-
6238, 942 N.E.2d 332, ¶35, “[t]he law-of-the-case doctrine is rooted in
principles of res judicata and issue preclusion * * *.” Further, the Fischer
court noted that prior decisions have held that the law of the case doctrine “ ‘
precludes a litigant from attempting to rely on arguments at a retrial which
were fully pursued, or available to be pursued, in a first appeal.’ ” Id. at ¶
34; quoting Hubbard ex rel. Creed v. Sauline, 74 Ohio St.3d 402, 404-405,
659 N.E.2d 781 (1996). Thus, because any issue related to the late filing of
the final judicial report should have been apparent to the parties and
therefore was available to be pursued by the parties in the original, direct
appeal, but was not, any argument based thereon should have been barred,
we believe, at any additional proceedings at the trial court level.
{¶16} Recently, several Ohio courts have been confronted with
questions in the area of foreclosure law with respect to when a trial court
may vacate a prior judgment that was either not appealed, or was appealed
and resulted in an affirmance by the reviewing court. These questions seem
to stem from the recent holding of the Supreme Court of Ohio in the case of
Federal Home Loan Mortgage Corporation v. Schwartzwald, et al, 134 Scioto App. No. 13CA3564 13
Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214. Schwartzwald did not
involve the grant or denial of a Civ.R. 60(B) motion for relief from
judgment. Rather, in Schwartzwald, it was argued by the homeowners that
the bank lacked standing to sue because it commenced the foreclosure action
before it obtained an assignment of the promissory note and mortgage
securing the Schwartzwald’s loan. Id. at ¶ 2. The trial court granted
summary judgment in favor of the bank and the appellate court affirmed.
The Supreme Court of Ohio, however, reversed, holding that the bank, under
the facts, had no standing to invoke the jurisdiction of the common pleas
court. Id. at paragraph one of the syllabus. In reaching its decision, the
Court noted that “ ‘the issue of standing, inasmuch as it is jurisdictional in
nature, may be raised at any time during the pendency of the proceedings.’ ”
Id. at ¶ 22; quoting New Boston Coke Corp. v. Tyler, 32 Ohio St.3d 216,
218, 513 N.E.2d 302 (1987).
{¶17} A subsequent case, Waterfall Victoria Master Fund Limited v.
Yeager, et al., 11th Dist. Lake No. 2012-L-071, 2013-Ohio-3206, illustrates
how the Schwartzwald holding has been carried forward. In Yeager, a
complaint in foreclosure was filed and default judgment was granted in favor
of the bank. Id. at ¶ 2-4. Yeager filed a direct appeal, but the appellate court
affirmed the judgment in favor of the bank. Id. at ¶ 4. After Yeager’s home Scioto App. No. 13CA3564 14
sold at a sheriff’s sale, Yeager filed a Civ.R. 60(B) motion seeking relief
from the default judgment. Id. at ¶ 5. In support of the motion, Yeager
argued that the bank did not have any interest in the property at the time it
foreclosed. Id. The trial court denied the motion for relief from judgment
and Yeager appealed again. Id.
{¶18} On appeal, the trial court analyzed the issues raised under a
Civ.R. 60(B) framework but then went into a law of the case/res judicata
analysis, noting the intervening Schwartzwald decision that was released
after the briefs had been filed. Id. at ¶ 8-13. The court construed Yeager’s
arguments on appeal as challenging the banks’ standing. Id. at ¶ 16. As
such, the court held neither res judicata nor the law of the case doctrine
barred consideration of the argument on appeal. Id. Nonetheless, however,
the court overruled Yeager’s argument on the merits, holding the bank had
established standing to sue at the trial court level. Id. at ¶ 17-19. The court
further held that Yeager’s additional argument, “inasmuch as [it did not]
affect Appellee’s standing to bring suit and invoke the jurisdiction of the
trial court,” was barred by res judicata because it was “an argument that
should have been and could have been previously raised.” Id. at ¶ 20.
{¶19} Similar but not identical issues were addressed in Chemical
Bank, N.A. v. Krawczyk, et al., 8th Dist. Cuyahoga No. 98263, 2013-Ohio- Scioto App. No. 13CA3564 15
3614. In Krawczyk, summary judgment in favor of the bank was granted
and Krawczyk did not file an appeal. Id. at ¶ 5. Two months later,
Krawczyk filed a Civ.R. 60(B) motion for relief from judgment, arguing the
bank lacked standing. Id. at ¶ 6. The motion was denied by the trial court
and Krawczyk filed an appeal from the denial of the motion, again arguing
the bank lacked standing. Id. at ¶ 9. The appellate court, however, found no
merit in Krawczyk’s argument, affirming the trial court’s decision finding
the bank demonstrated standing below, and noting that Krawczyk was
attempting to use “a motion for relief from judgment as a substitute for a
timely filed appeal.” Id. at ¶ 10.
{¶20} Noting Krawczyk had failed to initially appeal, the court noted
“a defendant’s relief from final judgment is to timely file an appeal.” Id. at ¶
17. As the issue of standing was directly litigated in the trial court and
Krawczyk failed to appeal that decision, the court held Krawczyk’s
arguments were barred by res judicata. Id. at ¶ 22. In reaching its decision,
the court distinguished the situation from the facts in Schwartzwald. Id. at ¶
23. Specifically, the court commented that, even with respect to the issue of
standing, saying the issue of standing can be raised at any time does not
equate to “the issue of standing can be raised many times.” Id. at ¶ 29. Scioto App. No. 13CA3564 16
Finally, the Krawczyk court noted as follows regarding the holding in
Yeager:
“The lead opinion in Yeager affirms the decision based on a
Civ.R. 60(B) analysis, the concurring-in-judgment-only opinion
affirms based on res judicata, and the dissent would reverse the
trial court’s decision and allow the appellants the opportunity to
challenge the assignment of the note and/or mortgage.”
Krawczyk at ¶ 30, FN. 4.
Clearly, Yeager was a divided decision. However, the division of the court
in that case illustrates the varied bases for the decisions issued in response to
these types of issues, and the number of legal grounds that are implicated
when a case comes before a court with such a procedural history.
{¶21} Based upon the foregoing, we conclude that the trial court’s
actions in vacating its prior decisions were inconsistent with this Court’s
appellate jurisdiction in affirming those decisions previously on appeal.
Further, as this Court did not remand the case to the trial court after our
affirmance on appeal, and the reasons advanced in support of the motion to
vacate did not raise the issue of standing or otherwise invoke the jurisdiction
of the trial court, the trial court was divested of jurisdiction to consider the Scioto App. No. 13CA3564 17
parties’ motions to vacate and/or for relief from judgment.3 As the trial
court lacked jurisdiction to vacate its prior orders, it exceeded its jurisdiction
in doing so.
{¶22} Accordingly, the decision of the trial court vacating American’s
original grant of summary judgment and decree in foreclosure, as well the
decision granting American’s renewed motion for summary judgment is
reversed. Further, we find, in accordance with our prior decision rendered in
American Savings Bank, fsb, et al. v. Carl E. Pertuset, et al., 4th Dist. Scioto
No. 11CA3442, 2013-Ohio-566, that the original grant of summary
judgment and decree in foreclosure stands valid as the law of the case, as
affirmed once already by this Court.
JUDGMENT REVERSED.
3 Although Appellee’s motion below was not expressly titled as a Civ.R. 60(B) motion below, it was for all intents and purposes a Civ.R. 60(B) motion and we treat it as such. Scioto App. No. 13CA3564 18
JUDGMENT ENTRY
It is ordered that the JUDGMENT BE REVERSED and Appellants recover costs from Appellee.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Scioto County Common Pleas Court to carry this judgment into execution.
Any stay previously granted by this Court is hereby terminated as of the date of this entry.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
Abele, P.J. & Hoover, J.: Concur in Judgment and Opinion.
For the Court,
BY: ___________________________________ Matthew W. McFarland, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment entry and the time period for further appeal commences from the date of filing with the clerk.