Farmers State Bank v. Sponaugle

2017 Ohio 4322, 92 N.E.3d 355
CourtOhio Court of Appeals
DecidedJune 16, 2017
DocketNO. 2016–CA–4
StatusPublished
Cited by7 cases

This text of 2017 Ohio 4322 (Farmers State Bank v. Sponaugle) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farmers State Bank v. Sponaugle, 2017 Ohio 4322, 92 N.E.3d 355 (Ohio Ct. App. 2017).

Opinions

FROELICH, J.

{¶ 1} Steven and Karen Sponaugle appeal from a judgment of the Darke County Court of Common Pleas, which confirmed the sale of their property and ordered the distribution of the proceeds and delivery of the deed. The Sponaugles claim that the *357trial court did not enter a final and appealable judgment of foreclosure, and therefore it lacked the authority to order and confirm the sale of the property. For the following reasons, the trial court's judgment confirming the sale will be reversed and the matter will be remanded for further proceedings.

I. Background and Procedural History

{¶ 2} The Sponaugles obtained three separate loans from The Farmers State Bank, and they secured the notes with mortgages on their property. It is undisputed that the Sponaugles have defaulted on the loans. In October 2013, The Farmers State Bank filed a foreclosure action against the Sponaugles and others who may have had an interest in the property.

{¶ 3} On May 21, 2014, The Farmers State Bank and the Sponaugles reached a settlement agreement. The terms of the agreement included, among other things, that (1) the trial court would enter judgment in favor of the bank in the amount of $236,378.89 plus interest, (2) that the Sponaugles would pay $120,000 on or before August 23, 2014, in exchange for which the bank would dismiss its foreclosure action; and (3) that if the Sponaugles failed to pay the $120,000, the bank's mortgage liens would be foreclosed upon and the real estate sold "in accordance with the statutes and procedures currently in effect, free and clear of all further claims of the Defendant." The trial court signed the agreement as an agreed judgment entry, entering a monetary judgment in favor of The Farmers State Bank in the amount of $236,378.86, plus interest.

{¶ 4} The Sponaugles failed to make the $120,000 payment, and the trial court ordered the property to be sold. The trial court did not enter a separate judgment of foreclosure prior to ordering the sale, and the Sponaugles contested that the agreed judgment entry constituted a judgment of foreclosure. The Sponaugles subsequently filed for bankruptcy, and the order of sale was vacated. The case was stayed due the bankruptcy action.

{¶ 5} In February 2015, after the case was reactivated and with leave of court, The Farmers State Bank filed an amended complaint, which added two defendants, American Budget Company (ABC) and Midland Funding LLC. Ultimately, in November 2015, the bank moved for summary judgment against the Sponaugles, ABC, and the Darke County Treasurer, all of whom had filed answers, and for a default judgment against the four defendants who had not filed answers. The Sponaugles obtained an extension to file a response to the motion; no responsive memorandum was filed by them or any other party.1

{¶ 6} On December 15, 2015, the trial court granted summary judgment in favor of The Farmers State Bank against the Sponaugles, and it ordered a default judgment against three of the non-answering defendants. The trial court ordered a trial with respect to the Ohio Department of Taxation, which also had not filed an answer. The trial court's summary judgment entry did not mention ABC or the Darke County Treasurer. On January 4, 2016, after a trial, the trial court granted judgment to the bank against the Ohio Department of Taxation.

{¶ 7} On January 12, 2016, the trial court entered a "Judgment Entry-Decree of Foreclosure." The judgment entry found that the Sponaugles owed The Farmers State Bank the sums, plus interest, of (1) $72,432.56, (2) $103,938.68, and (3) $73,456.94; the trial court granted judgment *358to the bank in those amounts. The court further found that the three mortgage liens constituted the first, second, and third best liens on the property. The court found that the Darke County Treasurer may claim a lien on the property and that ABC claimed an interest by virtue of a certificate of judgment. The trial court ordered the equity of redemption foreclosed, that the property be sold, and set forth the priority of the claims against the property (the Darke County Treasurer tax lien, The Farmers State Bank's three mortgage liens, then ABC's certificate of judgment).

{¶ 8} The Sponaugles appealed from the judgment and decree of foreclosure. The Farmers State Bank v. Sponaugle , 2d Dist. Darke No. 16CA2 ("Sponaugle I "). They also asked the trial court to stay the judgment of foreclosure. The trial court granted the stay on the condition that the Sponaugles post a $141,458.94 supersedeas bond. The Sponaugles failed to post the bond, and a sheriff's sale was conducted on February 26, 2016. The Farmers State Bank purchased the property for $85,334.

{¶ 9} On March 10, 2016, we issued a show cause order in Sponaugle I , questioning whether the trial court's judgment and decree of foreclosure was a final appealable order. Due to the show cause order, the Sponaugles asked the trial court to set aside the sale. On March 29, the bank asked the trial court to confirm the sale and to order the distribution of the proceeds.

{¶ 10} On April 18, 2016, we dismissed Sponaugle I , finding that the January 12, 2016 judgment entry was not a final appealable order. We stated that the judgment entry did not "determine the amounts due on all the liens, namely, the liens held by American Budget Company and the Darke County Treasurer." Id. , citing Second Nat. Bank of Warren v. Walling , 7th Dist. Mahoning No. 01-CA-62, 2002-Ohio-3852, 2002 WL 1746496, ¶ 18.

{¶ 11} On April 21, 2016, the trial court denied the Sponaugles' motion to vacate the sale and granted the bank's motion to confirm the sale of the property. The trial court reasoned:

The Court finds that the proposed Entry Confirming Sale properly accounts for the amount due to the Darke County Treasurer for real estate taxes. (The Court opines that it properly granted judgment on the cross-claim of the Treasurer when adjudicating its priority, in compliance with R.C. 323.11, R.C. 323.47(B) and R.C. 5721.10 ; also, it notes that the tax amount in the Entry of Confirmation was different than one which might have been included in the Decree of Foreclosure since another half year taxes had accrued awaiting sale.)
The Court finds that default and summary judgment was properly granted against various parties previously described. Specifically, the Court finds that summary judgment is properly granted against American Budget Company since it filed an answer to the complaint, no counter-claim and no pleadings in response to the motion for summary judgment. The trial verdict was properly granted against the Ohio Department of Taxation. Finally, the Court finds that the Sale proceeds are insufficient to pay any junior lien holders.
Defendants Sponaugle have failed to properly effect a stay of the Sheriff's Sale pursuant to the Ohio Rule[s] of Civil Procedure and Ohio Rules of Appellate Procedure. Sponaugles could have attended the sale and submitted bids to protect their own interests but did not do so though aware of its date; they have not demonstrated actual prejudice by the sale's processes.

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Bluebook (online)
2017 Ohio 4322, 92 N.E.3d 355, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farmers-state-bank-v-sponaugle-ohioctapp-2017.