[Cite as Aurora Loan Servs., LLC v. Phillips, 2011-Ohio-2954.]
COURT OF APPEALS KNOX COUNTY, OHIO FIFTH APPELLATE DISTRICT
JUDGES: AURORA LOAN SERVICES, LLC : Hon. W. Scott Gwin, P.J. : Hon. William B. Hoffman, J. Plaintiff-Appellee : Hon. Julie A. Edwards, J. : -vs- : : Case No. 10-CA-000021 SUZANNA PHILLIPS AND : CHARLES PHILLIPS : : OPINION Defendant-Appellant
CHARACTER OF PROCEEDING: Civil appeal from the Knox County Court of Common Pleas, Case No. 08FR11-0677
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: June 16, 2011
APPEARANCES:
For Plaintiff-Appellee For Defendant-Appellants
KRISTI L. PALLEN GRACE DOBERDRUK P.O. Box 968 JAMES R. DOUGLASS 2450 Edison Blvd. 20521 Chagrin Blvd., Ste. D Twinsburg OH 44087 Shaker Heights, OH 44122
MARC E. DANN 20521 Chagrin Blvd. Shaker Heights, OH 44122 [Cite as Aurora Loan Servs., LLC v. Phillips, 2011-Ohio-2954.]
Gwin, P.J.
{¶1} Defendants-appellants Suzanna and Charles D. Phillips appeal a
judgment of the Court of Common Pleas of Knox County, Ohio, which confirmed the
foreclosure sale of their home and ordered distribution of the proceeds. Appellants
assign as error:
{¶2} “I. THE TRIAL COURT ERRED WHEN IT REFUSED TO VACATE THE
JUDGMENT AS VOID AB INITIO BECAUSE AURORA LOAN SERVICES, LLC
NEVER HAD STANDING TO FORECLOSE.”
{¶3} It appears from the record appellants’ original lender was Lehman
Brothers Bank, FSB. Appellants gave Lehman Brothers an adjustable rate promissory
note, and signed a mortgage in favor of Mortgage Electronic Registration Systems
(MERS) as nominee for Lehman Brothers Bank. Subsequently, MERS assigned the
mortgage to appellee.
{¶4} Appellants defaulted on the note and mortgage, and appellee Aurora Loan
Services, LLC filed a complaint to foreclose on appellants’ property on November 17,
2008. Appellee alleged it was the holder of the note and mortgage.
{¶5} Appellants did not file an answer, until fourteen months after the filing of
the complaint, when they filed a pro se motion for leave to plead. The court overruled
the motion but nevertheless appellants filed their answer. The trial court sustained
appellee’s motion to strike, and subsequently granted a default judgment against
appellants on May 28, 2010.
{¶6} On September 16, the day before the scheduled sheriff’s sale, appellants
filed an emergency motion to stay the sale, to vacate the judgment of foreclosure as Knox County, Case No. 10-CA-000021 3
void ad initio, and to dismiss for lack of standing. The trial court overruled the motions,
and the sale proceeded. The court’s order confirming the sale was journalized on
October 27, 2010. Appellants then filed a motion to vacate the confirmation of the
sheriff’s sale on November 4, 2010. Before the court ruled on the motion, appellants
filed a notice of appeal from the court’s judgment entry confirming the sale and
ordering distribution. The motion to vacate remains pending.
{¶7} Appellants argue the court erred in overruling their motion to vacate the
judgment as void ab initio. Appellants argue appellee had no standing to bring the
foreclosure action, and thus the complaint did not invoke the trial court’s subject matter
jurisdiction.
{¶8} Courts have drawn a clear distinction between subject matter jurisdiction
and standing. Subject matter jurisdiction refers to the statutory and/or constitutional
power to adjudicate a case. Pratts v. Hurley, 102 Ohio St.3d 81, 2004–Ohio–1980,
paragraph 11. A jurisdictional defect cannot be waived. Painesville v. Lake County
Budget Commission (1978), 56 Ohio St.2d 282, 383 N.E.2d 896. Lack of jurisdiction
can be raised at any time, even for the first time on appeal. See In re: Byard (1996), 74
Ohio St.3d 294, 296, 658 N.E.2d 735, 737. This is because jurisdiction is a condition
precedent to the court's ability to hear the case.
{¶9} A judgment entered by a court that lacks subject matter jurisdiction is void
ab initio Patton v. Diemer (1988), 35 O.St.3d 68, 518 N.E.2d 941. The authority to
vacate a void judgment does not arise from Civ.R. 60 (B), but is an inherent common
law power. Patton syllabus paragraph 4 by the court, citing Lincoln Tavern v. Snader Knox County, Case No. 10-CA-000021 4
(1956), and Westmoreland v. Valley Homes Corp. (1975), 42 Ohio St.2d 291, 294, 71
O.O.2d 262, 264, .
{¶10} By contrast, Civ. R. 17(A) provides in part:
{¶11} “Every action shall be prosecuted in the name of the real party in interest.
* * * No action shall be dismissed on the ground that it is not prosecuted in the name of
the real party in interest until a reasonable time has been allowed after objection for
ratification of commencement of the action by, or joinder or substitution of, the real
party in interest. Such ratification, joinder, or substitution shall have the same effect as
if the action had been commenced in the name of the real party in interest.”
{¶12} A real party in interest is “one who has a real interest in the subject matter
of the litigation, and not merely an interest in the action itself, i.e., one who is directly
benefitted or injured by the outcome of the case.” Shealy v. Campbell (1985), 20 Ohio
St.3d 23, 24-25, 485 N.E.2d 701.
{¶13} If a claim is asserted by one who is not the real party in interest, then the
party lacks standing to prosecute the action, but the court is not deprived of subject
matter jurisdiction. See State ex rel. Tubbs Jones v. Suster (1998), 84 Ohio St.3d 70,
701 N.E.2d 1002, citing State ex rel. Smith v. Smith (1996), 75 Ohio St.3d 418, 420, 662
N.E.2d 366, 369; and State ex rel. LTV Steel Co. v. Gwin (1992), 64 Ohio St.3d 245,
251, 594 N.E.2d 616, 621.
{¶14} Because compliance with Civ. R. 17 is not necessary to invoke the
jurisdiction of the court, the failure to name the real party in interest is an objection or
defense to a claim which is waived if not timely asserted. Suster, supra. Knox County, Case No. 10-CA-000021 5
{¶15} The trial court overruled appellants’ motion to vacate the judgment of
foreclosure as void ab initio on September 17, 2010 and appellants did not appeal. An
order of foreclosure and sale is a final appealable order, and the subsequent order
confirming the sale is second, separate, final appealable order. Sky Bank v. Mamone,
182 Ohio App. 3d 323, 2009-Ohio-2265, 912 N.E. 2d 668, at paragraph 25, citations
deleted.
{¶16} Because the judgment of foreclosure was a final appealable order, the
entry overruling the motion to vacate the judgment was also final and appealable. Riley
v. Cleveland Television Network, Cuyahoga App. No. 83752, 2004-Ohio-3299.
{¶17} Appellants’ notice of appeal is taken from the judgment entry confirming
the sale. Issues concerning the foreclosure process and decree may not be raised in
an appeal from an order which confirms the sheriff’s sale. Federal Home Mortgage
Corporation v. McDaniel (August 2, 1995), 9th District No. 17142.
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[Cite as Aurora Loan Servs., LLC v. Phillips, 2011-Ohio-2954.]
COURT OF APPEALS KNOX COUNTY, OHIO FIFTH APPELLATE DISTRICT
JUDGES: AURORA LOAN SERVICES, LLC : Hon. W. Scott Gwin, P.J. : Hon. William B. Hoffman, J. Plaintiff-Appellee : Hon. Julie A. Edwards, J. : -vs- : : Case No. 10-CA-000021 SUZANNA PHILLIPS AND : CHARLES PHILLIPS : : OPINION Defendant-Appellant
CHARACTER OF PROCEEDING: Civil appeal from the Knox County Court of Common Pleas, Case No. 08FR11-0677
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: June 16, 2011
APPEARANCES:
For Plaintiff-Appellee For Defendant-Appellants
KRISTI L. PALLEN GRACE DOBERDRUK P.O. Box 968 JAMES R. DOUGLASS 2450 Edison Blvd. 20521 Chagrin Blvd., Ste. D Twinsburg OH 44087 Shaker Heights, OH 44122
MARC E. DANN 20521 Chagrin Blvd. Shaker Heights, OH 44122 [Cite as Aurora Loan Servs., LLC v. Phillips, 2011-Ohio-2954.]
Gwin, P.J.
{¶1} Defendants-appellants Suzanna and Charles D. Phillips appeal a
judgment of the Court of Common Pleas of Knox County, Ohio, which confirmed the
foreclosure sale of their home and ordered distribution of the proceeds. Appellants
assign as error:
{¶2} “I. THE TRIAL COURT ERRED WHEN IT REFUSED TO VACATE THE
JUDGMENT AS VOID AB INITIO BECAUSE AURORA LOAN SERVICES, LLC
NEVER HAD STANDING TO FORECLOSE.”
{¶3} It appears from the record appellants’ original lender was Lehman
Brothers Bank, FSB. Appellants gave Lehman Brothers an adjustable rate promissory
note, and signed a mortgage in favor of Mortgage Electronic Registration Systems
(MERS) as nominee for Lehman Brothers Bank. Subsequently, MERS assigned the
mortgage to appellee.
{¶4} Appellants defaulted on the note and mortgage, and appellee Aurora Loan
Services, LLC filed a complaint to foreclose on appellants’ property on November 17,
2008. Appellee alleged it was the holder of the note and mortgage.
{¶5} Appellants did not file an answer, until fourteen months after the filing of
the complaint, when they filed a pro se motion for leave to plead. The court overruled
the motion but nevertheless appellants filed their answer. The trial court sustained
appellee’s motion to strike, and subsequently granted a default judgment against
appellants on May 28, 2010.
{¶6} On September 16, the day before the scheduled sheriff’s sale, appellants
filed an emergency motion to stay the sale, to vacate the judgment of foreclosure as Knox County, Case No. 10-CA-000021 3
void ad initio, and to dismiss for lack of standing. The trial court overruled the motions,
and the sale proceeded. The court’s order confirming the sale was journalized on
October 27, 2010. Appellants then filed a motion to vacate the confirmation of the
sheriff’s sale on November 4, 2010. Before the court ruled on the motion, appellants
filed a notice of appeal from the court’s judgment entry confirming the sale and
ordering distribution. The motion to vacate remains pending.
{¶7} Appellants argue the court erred in overruling their motion to vacate the
judgment as void ab initio. Appellants argue appellee had no standing to bring the
foreclosure action, and thus the complaint did not invoke the trial court’s subject matter
jurisdiction.
{¶8} Courts have drawn a clear distinction between subject matter jurisdiction
and standing. Subject matter jurisdiction refers to the statutory and/or constitutional
power to adjudicate a case. Pratts v. Hurley, 102 Ohio St.3d 81, 2004–Ohio–1980,
paragraph 11. A jurisdictional defect cannot be waived. Painesville v. Lake County
Budget Commission (1978), 56 Ohio St.2d 282, 383 N.E.2d 896. Lack of jurisdiction
can be raised at any time, even for the first time on appeal. See In re: Byard (1996), 74
Ohio St.3d 294, 296, 658 N.E.2d 735, 737. This is because jurisdiction is a condition
precedent to the court's ability to hear the case.
{¶9} A judgment entered by a court that lacks subject matter jurisdiction is void
ab initio Patton v. Diemer (1988), 35 O.St.3d 68, 518 N.E.2d 941. The authority to
vacate a void judgment does not arise from Civ.R. 60 (B), but is an inherent common
law power. Patton syllabus paragraph 4 by the court, citing Lincoln Tavern v. Snader Knox County, Case No. 10-CA-000021 4
(1956), and Westmoreland v. Valley Homes Corp. (1975), 42 Ohio St.2d 291, 294, 71
O.O.2d 262, 264, .
{¶10} By contrast, Civ. R. 17(A) provides in part:
{¶11} “Every action shall be prosecuted in the name of the real party in interest.
* * * No action shall be dismissed on the ground that it is not prosecuted in the name of
the real party in interest until a reasonable time has been allowed after objection for
ratification of commencement of the action by, or joinder or substitution of, the real
party in interest. Such ratification, joinder, or substitution shall have the same effect as
if the action had been commenced in the name of the real party in interest.”
{¶12} A real party in interest is “one who has a real interest in the subject matter
of the litigation, and not merely an interest in the action itself, i.e., one who is directly
benefitted or injured by the outcome of the case.” Shealy v. Campbell (1985), 20 Ohio
St.3d 23, 24-25, 485 N.E.2d 701.
{¶13} If a claim is asserted by one who is not the real party in interest, then the
party lacks standing to prosecute the action, but the court is not deprived of subject
matter jurisdiction. See State ex rel. Tubbs Jones v. Suster (1998), 84 Ohio St.3d 70,
701 N.E.2d 1002, citing State ex rel. Smith v. Smith (1996), 75 Ohio St.3d 418, 420, 662
N.E.2d 366, 369; and State ex rel. LTV Steel Co. v. Gwin (1992), 64 Ohio St.3d 245,
251, 594 N.E.2d 616, 621.
{¶14} Because compliance with Civ. R. 17 is not necessary to invoke the
jurisdiction of the court, the failure to name the real party in interest is an objection or
defense to a claim which is waived if not timely asserted. Suster, supra. Knox County, Case No. 10-CA-000021 5
{¶15} The trial court overruled appellants’ motion to vacate the judgment of
foreclosure as void ab initio on September 17, 2010 and appellants did not appeal. An
order of foreclosure and sale is a final appealable order, and the subsequent order
confirming the sale is second, separate, final appealable order. Sky Bank v. Mamone,
182 Ohio App. 3d 323, 2009-Ohio-2265, 912 N.E. 2d 668, at paragraph 25, citations
deleted.
{¶16} Because the judgment of foreclosure was a final appealable order, the
entry overruling the motion to vacate the judgment was also final and appealable. Riley
v. Cleveland Television Network, Cuyahoga App. No. 83752, 2004-Ohio-3299.
{¶17} Appellants’ notice of appeal is taken from the judgment entry confirming
the sale. Issues concerning the foreclosure process and decree may not be raised in
an appeal from an order which confirms the sheriff’s sale. Federal Home Mortgage
Corporation v. McDaniel (August 2, 1995), 9th District No. 17142.
{¶18} The decision to confirm or set aside a judicial sale is left to the sound
discretion of the trial court. National Union Fire Insurance Company v. Hall,
Montgomery App. No. 19331, 2003-Ohio-462, at paragraph 12. A trial court’s task in
determining whether to confirm a sheriff’s sale is to review the sale and ensure it was
conducted in accord with R.C. 2329.01 through R.C. 2329.61. Mamone, supra.
Appellants set forth no arguments that the court abused its discretion in confirming the
sheriff’s sale, and do not allege any irregularity in the procedure.
{¶19} Finally, this court has held if the subject property has been sold, any
appeal is moot. See, e.g., Bank One N.A v. Lent, Guernsey App. No. 06CA000008,
2007-Ohio-1753. Knox County, Case No. 10-CA-000021 6
{¶20} The assignment of error is overruled.
{¶21} For the foregoing reasons, the judgment of the Court of Common Pleas of
Knox County, Ohio, is affirmed.
By Gwin, P.J.,
Hoffman, J., and
Edwards, J., concur
_________________________________ HON. W. SCOTT GWIN
_________________________________ HON. WILLIAM B. HOFFMAN
_________________________________ HON. JULIE A. EDWARDS WSG:clw 0524 [Cite as Aurora Loan Servs., LLC v. Phillips, 2011-Ohio-2954.]
IN THE COURT OF APPEALS FOR KNOX COUNTY, OHIO
FIFTH APPELLATE DISTRICT
AURORA LOAN SERVICES, LLC : : Plaintiff-Appellee : : : -vs- : JUDGMENT ENTRY : SUZANNA PHILLIPS AND : CHARLES PHILLIPS : : : Defendant-Appellant : CASE NO. 10-CA-000021
For the reasons stated in our accompanying Memorandum-Opinion, the
judgment of the Court of Common Pleas of Knox County, Ohio, is affirmed. Costs to
appellants.
_________________________________ HON. JULIE A. EDWARDS