Farmers State Bank v. Sponaugle (Slip Opinion)

2019 Ohio 2518
CourtOhio Supreme Court
DecidedJune 27, 2019
Docket2017-1377
StatusPublished
Cited by28 cases

This text of 2019 Ohio 2518 (Farmers State Bank v. Sponaugle (Slip Opinion)) is published on Counsel Stack Legal Research, covering Ohio Supreme Court 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 (Slip Opinion), 2019 Ohio 2518 (Ohio 2019).

Opinion

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Farmers State Bank v. Sponaugle, Slip Opinion No. 2019-Ohio-2518.]

NOTICE This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.

SLIP OPINION NO. 2019-OHIO-2518 FARMERS STATE BANK, APPELLANT, v. SPONAUGLE ET AL., APPELLEES. [Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Farmers State Bank v. Sponaugle, Slip Opinion No. 2019-Ohio-2518.] Foreclosure sales—Final orders—Law-of-the-case doctrine does not require this court to adhere to court of appeals’ prior determination that foreclosure decree was not a final, appealable order—Foreclosure decree left no issues remaining to be determined as to rights and liabilities of the parties and therefore was a final, appealable order—Court of appeals’ judgment reversed and trial court’s order confirming sale reinstated. (No. 2017-1377—Submitted January 30, 2019—Decided June 27, 2019.) APPEAL from the Court of Appeals for Darke County, No. 16CA00004, 2017- Ohio-4322 and 2017-Ohio-7744. _____________________ FRENCH, J. SUPREME COURT OF OHIO

{¶ 1} This appeal requires us to address once again what constitutes a final, appealable foreclosure decree. Before reaching us, the long, winding path of this foreclosure action included two intermediate-court appeals initiated by appellees, Steven and Karen Sponaugle. {¶ 2} The Sponaugles’ first appeal challenged the trial court’s entry of a foreclosure decree in favor of appellant, Farmers State Bank (“Farmers”). The Second District Court of Appeals dismissed that appeal for lack of a final, appealable order because the foreclosure decree did not state the amounts owed to two other lienholders. During the first appeal, the Sponaugles’ property sold at a sheriff’s sale. {¶ 3} The Sponaugles’ second appeal challenged the trial court’s order confirming the sale of the property. The Second District concluded that the law- of-the-case doctrine required adherence to its earlier decision that the foreclosure decree was not a final, appealable order. In the absence of a final, appealable order, the court of appeals held that the trial court had no authority to confirm the sale. {¶ 4} Farmers now appeals the Second District’s reversal of the trial court’s confirmation of sale. We reverse the judgment of the court of appeals, conclude that the foreclosure decree against the Sponaugles was a final, appealable order, and reinstate the trial court’s confirmation of sale. FACTS AND PROCEDURAL BACKGROUND {¶ 5} In October 2013, Farmers initiated a foreclosure action against the Sponaugles seeking judgment on three promissory notes secured by three mortgages on the Sponaugles’ property in Darke County, Ohio. Farmers also named as defendants other lienholders with a potential interest in the property. {¶ 6} By way of an agreed entry in May 2014, the trial court entered judgment against the Sponaugles in the amount of $236,378.89, plus interest. The entry also stated that Farmers would dismiss the action if the Sponaugles paid $120,000 on or before August 23, 2014. If they failed to pay, then Farmers would

2 January Term, 2019

be entitled to foreclose on the mortgages free and clear of all further claims of the Sponaugles. The Sponaugles did not make any payments to Farmers and instead filed a bankruptcy petition. After dismissal of the bankruptcy case, the trial court reactivated the foreclosure case and granted summary judgment in December 2015 in favor of Farmers against the Sponaugles. The foreclosure decree {¶ 7} On January 12, 2016, the trial court entered a foreclosure decree against the Sponaugles. The foreclosure decree granted judgment for Farmers and found the Sponaugles liable for the total amount of principal on the three loans, plus interest. The decree also stated that Farmers’ three mortgage liens constituted the first, second, and third best liens on the property. {¶ 8} The court found that all the defendants had been duly served and entered judgment against four nonanswering defendants: Chase Bank, GT Daubenspeck D.C., Inc., Midland Funding, L.L.C., and the Ohio Department of Taxation. {¶ 9} The foreclosure decree also stated that the Darke County Treasurer had a tax lien on the property and that American Budget Company had a lien interest by virtue of a certificate of judgment. The decree did not state the amounts due on those two liens. The decree ordered the sale of the property and payment of proceeds in accordance with the following order of priority: the Darke County Treasurer’s tax lien, Farmers’ three mortgage liens, and then the judgment lien of American Budget Company. Sheriff’s sale and appeal of the foreclosure decree {¶ 10} The Sponaugles appealed the foreclosure decree to the Second District. The trial court granted the Sponaugles’ motion to stay the court’s foreclosure judgment, but the court of appeals denied their request to waive the bond requirement. Because the Sponaugles did not post the required bond, a sheriff’s sale took place on February 26, 2016.

3 SUPREME COURT OF OHIO

{¶ 11} In March 2016, after the sheriff’s sale but before the confirmation of sale, the Second District issued a show-cause order questioning whether the trial court’s foreclosure entry was a final, appealable order. The court of appeals then dismissed the Sponaugles’ appeal for lack of a final, appealable order because the foreclosure decree did not state the amounts due on the liens held by the Darke County Treasurer and American Budget Company. 2d Dist. Darke No. 16CA000002 (Apr. 18, 2016) (“Sponaugle I”). Order confirming the sale of the property {¶ 12} On April 21, 2016, the trial court granted Farmers’ motion to confirm the sale of the property and ordered the distribution of proceeds from the sale and the execution and delivery of the property to Farmers by deed. Farmers purchased the property. After the payment of court costs, real-estate taxes to Darke County, and miscellaneous fees, the remaining funds were paid to Farmers and the court entered a deficiency judgment for Farmers. {¶ 13} The confirmation order also noted that American Budget Company released its certification-of-judgment lien on or about February 16, 2016. Appeal of the order confirming the sale {¶ 14} The Sponaugles appealed the trial court’s confirmation of the sheriff’s sale, asserting two assignments of error with the same underlying argument: that the trial court erred in confirming the sale of the Sponaugles’ property because the underlying foreclosure decree was not a final, appealable order. The Sponaugles did not assert any other grounds for challenging the validity of the confirmation of sale. {¶ 15} The Second District concluded that the law-of-the-case doctrine required adherence to its earlier determination that the foreclosure decree was not a final, appealable order. 2017-Ohio-4322, 92 N.E.3d 355, ¶ 18 (“Sponaugle II”). In the absence of a final, appealable order, the court of appeals concluded that the

4 January Term, 2019

trial court abused its discretion by ordering the sale of the property and confirming the sale. Id. at ¶ 20. {¶ 16} Farmers filed an application for reconsideration, which the Second District granted in part and denied in part. The court granted reconsideration with respect to its remand language in Sponaugle II, which had instructed the trial court to vacate the confirmation of sale and order the return of the deed to the Sponaugles. See id. at ¶ 33.

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2019 Ohio 2518, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farmers-state-bank-v-sponaugle-slip-opinion-ohio-2019.