DCR Mtge. IV Sub I, L.L.C. v. Hines Invests., L.L.C.

2011 Ohio 5091

• Court: Ohio Court of Appeals
• Decided: September 29, 2011
• Docket: 11-CA-24
• Status: Published

Opinion

[Cite as DCR Mtge. IV Sub I, L.L.C. v. Hines Invests., L.L.C., 2011-Ohio-5091.]

COURT OF APPEALS FAIRFIELD COUNTY, OHIO FIFTH APPELLATE DISTRICT

: JUDGES: DCR MORTGAGE IV SUB I, LLC : W. Scott Gwin, P.J. : Sheila G. Farmer, J. Plaintiff-Appellee : Julie A. Edwards, J. : -vs- : Case No. 11-CA-24 : : HINES INVESTMENTS, LLC, et al., : OPINION

Defendants-Appellants

CHARACTER OF PROCEEDING: Civil Appeal from Fairfield County Court of Common Pleas Case No. 10-CV-1142

JUDGMENT: Dismissed

DATE OF JUDGMENT ENTRY: September 29, 2011

APPEARANCES:

For Plaintiff-Appellee For Defendants-Appellants

TAMI HART KIRBY, ESQ. JAMES G. VARGO WILLIAM G. DEAS, ESQ. JAMES G. VARGO WALTER REYNOLDS, ESQ. 6598 Brock Street, First Floor Porter Wright Morris & Arthur LLP Dayton, Ohio 45402 One South Main Street, Ste. 1600 Dayton, Ohio 45402 [Cite as DCR Mtge. IV Sub I, L.L.C. v. Hines Invests., L.L.C., 2011-Ohio-5091.]

Edwards, J.

{¶1} Appellants, Hines Investments, LLC and Pamela Hines, appeal a

judgment of the Fairfield County Common Pleas Court overruling their motion to remove

a receiver appointed earlier in this case. Appellee is DCR Mortgage IV Sub I, LLC.

STATEMENT OF FACTS AND CASE

{¶2} On September 13, 2010, appellee filed the instant foreclosure action. At

the same time, appellee filed a motion for appointment of a receiver. The court granted

the motion to appoint a receiver on September 14, 2010.

{¶3} On October 28, 2010, appellant filed an answer to the complaint. They

filed a motion to remove the receiver on November 18, 2010, arguing that appellee had

not acted in good faith with regard to the loans secured by the property they sought to

foreclose upon, and the expense of the receiver was unnecessary. The court held a

hearing on the motion and overruled the motion, finding appellants failed to set forth a

good reason for removal of the receiver. Appellants assign two errors on appeal:

{¶4} “I. THE TRIAL COURT ERRED BY GRANTING A MOTION FOR

APPOINTMENT OF A RECEIVER WITHOUT AFFORDING APPELLANTS DUE

PROCESS AND WITHOUT FIRST FOLLOWING THE LOCAL RULE PERMITTING

THE FILING OF AN OPPOSING MEMORANDUM WITHIN FOURTEEN DAYS.

{¶5} “II. ONCE THE PARTIES WERE PROVIDED PROPER NOTICE AND AN

OPPORTUNITY TO BE HEARD REGARDING THE APPOINTMENT OF A RECEIVER,

THE TRIAL COURT ERRED BY RETAINING THE RECEIVER AS THERE WAS

INSUFFICIENT EVIDENCE SUPPORTING THE NECESSITY OF A RECEIVER.” Fairfield County App. Case No. 11-CA-24 3

I

{¶6} Appellants’ first assignment of error claims error in the September 14,

2010, order appointing a receiver. Appellants recognized that their appeal is clearly

untimely as to this order, but argue because service was not perfected and the court did

not have jurisdiction over them at the time the order was issued, the order is void ab

initio and may be attacked at any time.

{¶7} Failure of proper service deprives the court of personal jurisdiction and

renders any judgment void ab initio. E.g., Pippin v. Hauser (1996), 111 Ohio App.3d

557; Rite Rug Co. v. Wilson (1995), 106 Ohio App.3d 59. The court may obtain

personal jurisdiction by service of process, voluntary appearance or waiver. Maryhew v.

Yova (1984), 11 Ohio St.3d 154, 156. Any objection to the assumption of personal

jurisdiction is waived by a party’s failure to assert a challenge to such jurisdiction at its

first appearance in the case. McBride v. Coble Express, Inc. (1993), 92 Ohio App.3d

505, 510, 636 N.E.22d 356, 359.

{¶8} Appellants filed an answer to the complaint on October 28, 2010, in which

they failed to raise the defense of lack of personal jurisdiction. Further, in their motion

to remove the receiver, filed November 18, 2010, appellants failed to raise lack of

personal jurisdiction at the time the receiver was appointed, but rather argued that

appellee had not acted in good faith with regard to the loans secured by the property

they sought to foreclose upon, and the expense of the receiver was unnecessary. By

failing to raise lack of personal jurisdiction in their first appearance in the case,

appellants have waived the right to challenge the September 14, 2010 judgment at this

point in the proceedings, and their appeal is clearly untimely as to that judgment. Fairfield County App. Case No. 11-CA-24 4

{¶9} The first assignment of error is overruled.

II

{¶10} In their second assignment of error, appellants argue the court erred in

overruling their motion to remove the receiver.

{¶11} Proceedings related to the appointment and removal of receivers are

special proceedings under R.C. 2505.02 and orders for appointment and removal affect

a substantial right made in a special proceeding. Such orders are, therefore, final and

appealable. See, e.g., Cincinnati, Sandusky & Cleveland Rd. Co. v. Sloan (1876), 31

Ohio St. 1, paragraph two of the syllabus; Forest City Invest. Co. v. Haas (1924), 110

Ohio St. 188, 143 N.E. 549; Metro Life Ins. Co. v. Begin, 59 Ohio App. 5, 6, 7, 16

N.E.2d 1015. However, an order overruling a motion to remove a receiver is not an

order affecting substantial rights of the parties from which an appeal may be

prosecuted, since the status quo between the parties remains the same. Neighbors v.

Thistle Down Co. (1926), 26 Ohio App. 324, 159 N.E. 111; Stiver v. Stiver (1939), 63

Ohio App. 327, 17 O.O. 96, 26 N.E.2d 595. Therefore, an order denying a motion to

remove a receiver is not a final, appealable order since the status quo between the

parties remains the same. Prudential Ins. Co. v. Corporate Circle, Ltd. (1995), 103 Ohio

App.3d 93, 658 N.E.2d 1066, 1071. Fairfield County App. Case No. 11-CA-24 5

{¶12} The order appealed from is an order overruling a motion to remove a

receiver and is therefore, not a final, appealable order.

{¶13} The appeal is dismissed for want of jurisdiction.

By: Edwards, J.

Gwin, P.J. and

Farmer, J. concur

______________________________

JUDGES

JAE/r0804 [Cite as DCR Mtge. IV Sub I, L.L.C. v. Hines Invests., L.L.C., 2011-Ohio-5091.]

IN THE COURT OF APPEALS FOR FAIRFIELD COUNTY, OHIO

FIFTH APPELLATE DISTRICT

DCR MORTGAGE IV SUB I, LLC : : Plaintiff-Appellee : : : -vs- : JUDGMENT ENTRY : HINES INVESTMENTS, LLC, et al., : : Defendants-Appellants : CASE NO. 11-CA-24

For the reasons stated in our accompanying Memorandum-Opinion on file, the

appeal of the Fairfield County Court of Common Pleas is dismissed. Costs assessed to

appellants.

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