Beacon Place at Church Sq. Homeowners Assn., Inc. v. Smith

2016 Ohio 4694

• Court: Ohio Court of Appeals
• Decided: June 30, 2016
• Docket: 103323
• Status: Published

Opinion

[Cite as Beacon Place at Church Sq. Homeowners Assn., Inc. v. Smith, 2016-Ohio-4694.]

Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 103323

BEACON PLACE AT CHURCH SQUARE HOMEOWNERS ASSOCIATION, INC. PLAINTIFF-APPELLEE

vs.

GLORIA P. SMITH, ET AL. DEFENDANTS-APPELLANTS

JUDGMENT: AFFIRMED

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-12-787506

BEFORE: Kilbane, P.J., E.T. Gallagher, J., and S. Gallagher, J.

RELEASED AND JOURNALIZED: June 30, 2016 ATTORNEYS FOR APPELLANT

Marc E. Dann Paul B. Bellamy Grace Mary Doberdruk The Dann Law Firm Co., L.P.A. P.O. Box 6031040 Cleveland, Ohio 44103

ATTORNEYS FOR APPELLEES

For Beacon Place at Church Square Home Association, Inc.

M. Katherine Bushey Garrett B. Humes Robert E. Kmiecik Kevin Fields Kaman & Cusimano, L.L.C. 50 Public Square - Suite 2000 Cleveland, Ohio 44113

Ann E. Leo Robert J. Koeth Koeth Rice & Leo Co. L.P.A. 1280 West Third Street Cleveland, Ohio 44113

For the city of Cleveland

Barbara A. Langhenry Director of Law - City of Cleveland Richard Bertovich Chief Assistant Director of Law 601 Lakeside Avenue - Room 106 Cleveland Ohio 44113 ATTORNEYS FOR APPELLEES (Cont.)

For KeyBank National Association

Rachel Kuhn Kaman & Cusimano, L.L.C. 50 Public Square - Suite 2000 Cleveland, Ohio 44113

James W. Sandy McGlinchey Stafford, P.L.L.C. 25550 Chagrin Boulevard - Suite 406 Cleveland, Ohio 44122

For Physicians Ambulance

Physicians Ambulance P.O. Box 636 Gates Mills, Ohio 44040

Also Listed

John Doe, Unknown Spouse 1946 E. 84th Street Cleveland, Ohio 44103 MARY EILEEN KILBANE, P.J.:

{¶1} Defendant-appellant, Gloria Smith (“Smith”), appeals from the trial court’s

judgment adopting the magistrate’s decision granting summary judgment in the

foreclosure action brought by plaintiff-appellee, Beacon Place at Church Square

Homeowner’s Association (“Beacon Place”) and granting default judgment to

defendant-appellee, KeyBank National Association (“KeyBank”). For the reasons set

forth below, we affirm.

{¶2} On July 20, 2012, Beacon Place filed a complaint for foreclosure against

Smith for failing to pay her condominium association homeowner’s assessments on the

subject property located at 1946 E. 84th Street, Cleveland, Ohio. Beacon Place included

KeyBank as a defendant in the lawsuit because of its interest in the subject property.

Smith executed a promissory note in the amount of $176,550, and executed a mortgage

granting KeyBank a security interest in the property in October 1988. Beacon Place also

named the city of Cleveland (“City”) and Physicians Ambulance as defendants because of

liens they had on the property.

{¶3} On September 4, 2012, KeyBank filed its answer and a cross-claim against

Smith.1 KeyBank alleged that: (1) it had the first and best lien on the subject property;

(2) Smith defaulted on the loan; and (3) Smith currently owed KeyBank the sum of

$124,018.94 plus interest at a rate of 5.5 percent per annum from June 1, 2011.

1KeyBank previously filed its own foreclosure action against Smith, which was dismissed without prejudice. See Cuyahoga C.P. CV-12-788102. KeyBank attempted service of the cross-claim on Smith via certified mail twice, which

was returned on both attempts. Thereafter, KeyBank served the cross-claim on Smith via

regular mail on November 16, 2012.

{¶4} On November 21, 2012, Smith filed an answer to Beacon Place’s complaint.

Smith did not address the allegations in KeyBank’s cross-claim. Beacon Place then

moved for default judgment and summary judgment on December 28, 2012. A hearing

was held before a magistrate on Beacon Place’s default judgment in March 2013. At the

hearing, the magistrate determined that Smith timely filed an answer to Beacon Place’s

complaint and denied Beacon Place’s motion for default judgment with regard to Smith.

The magistrate granted Beacon Place’s default motion with regard to the City and

Physicians Ambulance. The magistrate gave Smith until April 30, 2013, to file a brief in

opposition to Beacon Place’s pending motion for summary judgment.

{¶5} On April 30, 2013, Smith filed an answer and counterclaim against Beacon

Place. She did not file a brief in opposition to Beacon Place’s motion for summary

judgment. Beacon Place moved to strike the answer and counterclaim on May 20, 2013.

By July 18, 2013, the trial court had not ruled on Beacon Place’s motion, so it filed an

answer to Smith’s counterclaim. On February 10, 2014, the trial court granted, in a

journal entry, Beacon Place’s motion for summary judgment as to all claims. In the

entry, the trial court ordered Beacon Place to submit a proposed magistrate’s decision.

{¶6} Thereafter, on March 4, 2014, KeyBank filed a motion for default judgment

against Smith and Physicians Ambulance. That same day, KeyBank filed a proposed judgment entry adopting the magistrate’s decision, a final judicial report, a supplemental

final judicial report, and an attorney affidavit. Smith then appealed to this court in

Beacon Place at Church Square v. Smith, 8th Dist. Cuyahoga No. 101109. We

dismissed the appeal in April 2014 because the entry failed to state any details pertaining

to the order of foreclosure.

{¶7} Following our dismissal, KeyBank refiled its motion for default judgment on

June 24, 2014. KeyBank also filed a second supplemental final judicial report and a

military affidavit. On July 28, 2014, the magistrate issued a decision granting Beacon

Place’s motion for default judgment against the non-answering parties and its motion for

summary judgment. This decision did not address the merits of KeyBank’s motion for

default judgment, but recognized KeyBank’s priority interest in the property for purposes

of marshaling the liens. Smith never filed objections to the magistrate’s decision.

{¶8} On August 20, 2014, the court held a hearing on KeyBank’s motion for

default judgment. At the hearing, KeyBank explained that Smith never filed an answer

to its cross-claim even though she was served with the cross-claim via regular mail.

KeyBank also explained that an attorney affidavit was filed with its previous motion for

default judgment. Smith presented no evidence contesting service of the cross-claim and

her default and no evidence that KeyBank failed to comply with local rules in seeking

judgment. At the conclusion of the hearing, the magistrate granted KeyBank’s motion

for default judgment. The magistrate also issued a corresponding order stating that a “hearing [was] held on [KeyBank’s] motion for default judgment. [KeyBank’s] motion

for default judgment is granted as to the non-answering parties.”

{¶9} In the interim, Beacon Place filed a motion to clarify the docket that the trial

court’s grant of summary judgment in its favor also disposed of Smith’s counterclaim.

Smith then filed a second appeal in Beacon Place at Church Square v. Smith, 8th Dist.

Cuyahoga No. 101878. We dismissed the appeal because the matter was still pending in

the trial court.

{¶10} On July 8, 2015, the trial court issued a judgment entry adopting the

magistrate’s decision. In the judgment entry, the trial court granted KeyBank’s default

judgment against Smith. The trial court also granted Beacon Place’s motion for

summary judgment against Smith. The trial court clarified that Beacon Place was

entitled to summary judgment on all claims against Smith. With regard to Smith’s

counterclaim, the trial court stated: “[b]ased on the foregoing, [Beacon Place] is granted

summary judgment on the validity of its liens, and by extension, is granted judgment as to

[Smith’s] counterclaim which attempts to dispute the validity of the computation of

same.” The trial court found that KeyBank was entitled to be paid out of the proceeds of

any sale the amount of $124,018.94 plus interest at a rate of 5.5 percent per annum from

June 1, 2011. The trial court then set the matter for a sheriff’s sale on August 31, 2015.2

2A review of the trial court docket reveals that the property was sold at the sheriff’s sale on August 31, 2015. However, the trial court has not yet confirmed the sheriff’s sale. {¶11} Smith now appeals, raising the following two assignments of error for

review.

Assignment of Error One

The trial court abused its discretion by granting default judgment to Appellee KeyBank.

Assignment of Error Two

The trial court erred by adopting the magistrate’s decision and by clarifying the decision to also include judgment for [Beacon] on [Smith’s] counterclaim.

Default Judgment — KeyBank

{¶12} In the first assignment of error, Smith argues the trial court abused its

discretion when it adopted the magistrate’s decision, granting KeyBank’s motion for

default judgment.

{¶13} An appellate court reviews a trial court’s ruling on a motion for default

judgment for an abuse of discretion. Goodyear v. Waco Holdings, Inc., 8th Dist.

Cuyahoga No. 91432, 2009-Ohio-619, ¶ 19, citing Jones v. Dillard, 8th Dist. Cuyahoga

No. 87733, 2006-Ohio-6417. “The term ‘abuse of discretion’ connotes more than an

error of law or judgment; it implies that the court’s attitude is unreasonable, arbitrary or

unconscionable.’” (Citations omitted.) Blakemore v. Blakemore, 5 Ohio St.3d 217, 219,

450 N.E.2d 1140 (1983), quoting State v. Adams, 62 Ohio St.2d 151, 404 N.E.2d 144

(1980).

{¶14} Smith argues that the trial court abused its discretion when it granted

KeyBank’s motion for default judgment before the default hearing in August 2014. Smith claims the court granted KeyBank’s default judgment in the July 28, 2014

magistrate’s decision. However, a reading of this decision establishes that the trial court

did not grant KeyBank default judgment against Smith before the default judgment

hearing. Rather, the magistrate states that he considered Beacon Place’s complaint,

motion for default judgment, and motion for summary judgment; KeyBank’s answer and

cross-claim; and Smith’s answer. The magistrate granted Beacon Place’s motion for

summary judgment and motion for default judgment against the non-answering parties.

A review of the record reveals that the magistrate determined on August 20, 2014, that

KeyBank was entitled to default judgment.

{¶15} Smith further argues that KeyBank’s motion for default judgment should not

have been granted because KeyBank did not comply with the court’s order and Loc.R. 24

of the Court of Common Pleas of Cuyahoga County, General Division (“Loc.R. 24”).

Under Loc.R. 24, a motion for default judgment should be accompanied by a proposed

magistrate’s decision and a final judicial report. Smith contends that KeyBank failed to

include a proposed magistrate’s decision and a final judicial report with its motion for

{¶16} In the instant case, a review of the record reveals that KeyBank initially filed

its motion for default judgment on March 4, 2014. That same day, it filed both a

proposed order adopting the magistrate’s decision along with a final judicial report, a

supplemental judicial report, and an attorney affidavit. KeyBank then refiled its motion

for default judgment on June 24, 2014 (after the dismissal of her first appeal.) The motion was set for a hearing on August 20, 2014. Prior to the hearing, the record

demonstrates that KeyBank filed a second supplemental final judicial report and a

military affidavit. Based on the foregoing, we find that KeyBank complied with Loc.R.

24.

{¶17} Moreover, we note that Smith never filed an answer to KeyBank’s

cross-claim. Under Civ.R. 55, a party is entitled to default judgment when a defendant

has failed to plead or otherwise defend. Waco Holdings at ¶ 20; Civ.R. 55(A). If a

party has appeared in the action, due process mandates that the party be afforded a

reasonable opportunity to be heard after reasonable notice of such a hearing. Zashin,

Rich, Sutula & Monastra Co., LPA v. Offenberg, 90 Ohio App.3d 436, 443, 629 N.E.2d

1057 (8th Dist.1993).

{¶18} In the instant case, KeyBank’s cross-claim was served on Smith on

November 16, 2014. Smith had 28 days to file an answer, but failed to do so. Civ.R.

12(A)(1). KeyBank also gave Smith notice of its motion for default judgment on July

28, 2014. Smith attended the default hearing on August 20, 2014, at which she stated

that her issues were with Beacon Place.

{¶19} In light of the foregoing, we find that the trial court did not abuse its

discretion when it granted KeyBank’s motion for default judgment.

{¶20} Therefore, the first assignment of error is overruled.

Motion for Summary Judgment—Beacon Place {¶21} In the second assignment of error, Smith argues the court erred when it

granted Beacon Place summary judgment on its claims against Smith, including her

counterclaim.

{¶22} We review an appeal from summary judgment under a de novo standard of

review. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 1996-Ohio-336, 671

N.E.2d 241; Zemcik v. LaPine Truck Sales & Equip. Co., 124 Ohio App.3d 581, 585, 706

N.E.2d 860 (8th Dist.1998). In Zivich v. Mentor Soccer Club, 82 Ohio St.3d 367,

369-370, 1998-Ohio-389, 696 N.E.2d 201, the Ohio Supreme Court set forth the

appropriate test as follows.

{¶23} Pursuant to Civ.R. 56, summary judgment is appropriate when (1) there is

no genuine issue of material fact, (2) the moving party is entitled to judgment as a matter

of law, and (3) reasonable minds can come to but one conclusion and that conclusion is

adverse to the nonmoving party, said party being entitled to have the evidence construed

most strongly in his favor. Horton v. Harwick Chem. Corp., 73 Ohio St.3d 679,

1995-Ohio-286, 653 N.E.2d 1196, paragraph three of the syllabus. The party moving for

summary judgment bears the burden of showing that there is no genuine issue of material

fact and that it is entitled to judgment as a matter of law. Dresher v. Burt, 75 Ohio St.3d

280, 292-293, 1996-Ohio-107, 662 N.E.2d 264.

{¶24} Once the moving party satisfies its burden, the nonmoving party “may not

rest upon the mere allegations or denials of the party’s pleadings, but the party’s response,

by affidavit or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.” Civ.R. 56(E); Mootispaw v. Eckstein, 76 Ohio

St.3d 383, 385, 1996-Ohio-389, 667 N.E.2d 1197. Doubts must be resolved in favor of

the nonmoving party. Murphy v. Reynoldsburg, 65 Ohio St.3d 356, 358-359,

1992-Ohio-95, 604 N.E.2d 138.

{¶25} In the instant case, Beacon Place filed its motion for summary judgment in

December 2012. Smith never filed a brief in opposition to this motion. Instead, she

filed a counterclaim against Beacon Place in April 2013. The magistrate did not rule on

Beacon Place’s motion until February 10, 2014, when it granted Beacon Place summary

judgment as to all claims. The magistrate then issued a decision granting Beacon Place’s

motion for summary judgment on July 28, 2014, which was nearly 15 months after Smith

filed her counterclaim. Smith never filed objections to the magistrate’s decision.

{¶26} On August 19, 2014, Beacon Place filed a motion requesting the trial court

clarify the docket that the grant of summary judgment in Beacon Place’s favor also

included Smith’s counterclaim. Subsequently, in its entry adopting the magistrate’s

decision, the trial court granted summary judgment to Beacon Place “on the validity of its

liens, and by extension, is granted judgment as to [Smith’s] counterclaim which attempts

to dispute the validity of the computation of same.”

{¶27} While Smith contested the validity of Beacon Place’s lien in her

counterclaim, her assertion of a counterclaim in this case was not sufficient to defeat

summary judgment. Civ.R. 56(C) and (E). The allegations in her counterclaim do not

create an issue of fact regarding the validity of the lien. {¶28} It is well established that if the moving party has satisfied its initial burden

under Civ.R. 56(C), then the nonmoving party has a reciprocal burden, outlined in Civ.R.

56(E), to set forth specific facts showing that there is a genuine issue for trial. Dresher,

75 Ohio St.3d 280, 292-293, 1996-Ohio-107, 662 N.E.2d 264. If the nonmovant does

not so respond, summary judgment, if appropriate, shall be entered against the nonmoving

party. Id. at 293.

{¶29} Here, the record reveals that Beacon Place met its initial burden to

demonstrate the absence of a genuine issue of material fact, and Smith failed to set forth

specific facts to demonstrate the existence of a genuine issue of material fact. Thus,

under of Civ.R. 56, the trial court’s grant of summary judgment in Beacon Place’s favor

was proper.

{¶30} Accordingly, the second assignment of error is overruled.

{¶31} Judgment is affirmed.

It is ordered that appellee recover of appellant costs herein taxed.

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. MARY EILEEN KILBANE, PRESIDING JUDGE

EILEEN T. GALLAGHER, J., and SEAN C. GALLAGHER, J., CONCUR