Beneficial Ohio, Inc. v. Parish

2012 Ohio 1146
Ohio Court of Appeals·Decided March 16, 2012·No. 11CA3210·Published·Cited by 5 cases

Opinion

IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT ROSS COUNTY

Beneficial Ohio, Inc., : Case No. 11CA3210 :

Plaintiff-Appellee, :

: DECISION AND

v. : JUDGMENT ENTRY :

Danny L. Parish, et al., :

: RELEASED 3/16/12

Defendants-Appellants. :

APPEARANCES:

Luke M. Feeney and Joshua M. Goodwin, Southeastern Ohio Legal Services, Chillicothe, Ohio, for appellants Danny and Inez Parish.

Stephen D. Miles and Vincent A. Lewis, Dayton, Ohio, for appellee.

Harsha, J.

{¶1} Danny and Inez Parish (the Parishes) appeal the trial court’s decision granting Beneficial Ohio, Inc. a summary judgment on its foreclosure complaint. The Parishes contend because Beneficial’s complaint is barred by the affirmative defense of res judicata, the trial court should have dismissed it. Specifically, they argue that Beneficial previously filed and voluntarily dismissed two foreclosure complaints against them based on the same transaction or occurrence that is the subject of this case. Therefore, the Parishes claim that under Civ.R. 41(A)(1)’s double-dismissal rule, the second dismissal constituted an adjudication on the merits barring a third action.

{¶2} We conclude genuine issues of material fact exist about whether Beneficial’s complaints arose out of the same transaction or occurrence and therefore also exist about whether res judicata applies. Accordingly, the trial court erred when it

Ross App. No. 11CA3210 2

granted Beneficial a summary judgment. But it did not err when it failed to “dismiss” Beneficial’s complaint, i.e., grant the Parishes a summary judgment, in light of those same factual issues. We affirm the trial court’s judgment in part, reverse it in part, and remand for further proceedings.

I. Facts

{¶3} On March 13, 2007, the Parishes executed a note and a real estate mortgage in favor of Beneficial. After the Parishes missed payments under the note, they filed for bankruptcy and received a discharge that removed their personal liability on the note. However, the mortgage remained effective as security for the note. See Deutsche Bank Natl. Trust Co. v. Doucet, 10th Dist. No. 07AP-453, 2008-Ohio-589, at

¶17. Beneficial invoked an acceleration clause in the note, declaring all sums secured by the mortgage to be immediately due. Beneficial filed complaints against the Parishes in March 2008 and May 2009, seeking to foreclose the mortgage lien; however, each time it voluntarily dismissed its complaint under Civ.R. 41(A)(1)(a). After Beneficial filed each complaint, the Parishes made additional payments in varying amounts to the company.

{¶4} In October 2009, Beneficial filed a third foreclosure complaint against the Parishes. In response the Parishes filed a memorandum that argued the third complaint was barred by res judicata based on Civ.R. 41(A)(1)’s double-dismissal rule. The court denied this “motion to dismiss” without explanation. Subsequently, Beneficial filed for summary judgment. In their memorandum in opposition, the Parishes again claimed that the action was barred by res judicata and asked the court to “dismiss” the case. The court once more rejected the res judicata argument, finding that the Parishes made

Ross App. No. 11CA3210 3

“substantial payments” to Beneficial since it filed the first complaint. Because “[t]hese payments were credited and each foreclosure complaint sought a different balance” the court held that each suit involved a different set of operative facts and res judicata did not apply. After the court granted Beneficial a summary judgment, this appeal followed.

II. Assignment of Error

{¶5} The Parishes assign one error for our review:

The Court Erred in Failing to Dismiss Plaintiff’s Complaint and Subsequently Granting Plaintiff’s Motion for Summary Judgment.

III. Standard of Review

{¶6} The Parishes claim that the trial court erred when it granted Beneficial’s motion for summary judgment. The Parishes also argue that the trial court should have “dismissed” the third complaint because under Civ.R. 41(A)(1), Beneficial’s second dismissal constituted an adjudication on the merits and res judicata bars a third action. Although the Parishes characterized the relief sought in their memorandum in opposition to Beneficial’s motion for summary judgment as a “dismissal,” as we explain below, we construe it as a request for summary judgment in the Parishes’ favor.

{¶7} Civ.R. 41(A)(1) governs the voluntary dismissal of a civil action by the plaintiff and provides:

[A] plaintiff, without order of court, may dismiss all claims asserted by that plaintiff against a defendant by doing either of the following:

(a) filing a notice of dismissal at any time before the commencement of trial unless a counterclaim which cannot remain pending for independent adjudication by the court has been served by that defendant;

***

Unless otherwise stated in the notice of dismissal * * *, the dismissal is without prejudice, except that a notice of dismissal operates as an

Ross App. No. 11CA3210 4

adjudication upon the merits of any claim that the plaintiff has once dismissed in any court. (Emphasis added.)

In other words, if a plaintiff files two unilateral notices of dismissal regarding the same claim, “the second dismissal is with prejudice under [Civ.R. 41(1)(A)’s] double-dismissal rule, and res judicata applies if the plaintiff files a third complaint asserting the same cause of action.” U.S. Bank Natl. Assn. v. Gullotta, 120 Ohio St.3d 399, 2008-Ohio- 6268, 899 N.E.2d 987, at ¶25 (“Gullotta”), quoting Olynyk v. Scoles, 114 Ohio St.3d 56, 2007-Ohio-2878, 868 N.E.2d 254, at ¶10.

{¶8} However, rather than providing an independent mechanism for dismissal of a third complaint, Civ.R. 41(A)(1) merely describes the effect of a second dismissal on the plaintiff’s case. EMC Mtge. Corp. v. Jenkins, 164 Ohio App.3d 240, 2005-Ohio- 5799, 841 N.E.2d 855, at ¶8. Moreover, in construing Civ.R. 8(C) the Supreme Court of Ohio has found that res judicata cannot be raised in a Civ.R. 12(B) motion to dismiss. State, ex rel. Freeman v. Morris (1991), 62 Ohio St.3d 107, 109, 579 N.E.2d 702. However, res judicata can be raised in a motion for summary judgment. Id. Accordingly, we construe the Parishes’ argument to be that the trial court erred when it granted Beneficial a summary judgment and did not grant them a summary judgment.

{¶9} When reviewing a trial court’s decision on a motion for summary judgment, we conduct a de novo review governed by the standard set forth in Civ.R. 56. Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, at ¶8. Summary judgment is appropriate when the movant has established: 1.) there is no genuine issue of material fact; 2.) reasonable minds can come to but one conclusion, and that conclusion is adverse to the nonmoving party, with the evidence against that party being construed most strongly in its favor; and 3.) the moving party is entitled to

Ross App. No. 11CA3210 5 judgment as a matter of law. Bostic v. Connor (1988), 37 Ohio St.3d 144, 146, 524 N.E.2d 881, citing Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66, 375 N.E.2d 46 (per curiam). See Civ.R. 56(C).

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