Fifth Third Mtge., Co. v. Rankin

2012 Ohio 2806

Opinion

[Cite as Fifth Third Mtge., Co. v. Rankin, 2012-Ohio-2806.]

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

FIFTH THIRD MORTGAGE COMPANY, : Case No. 11CA8

Plaintiff-Appellee, :

v. : DECISION AND JOHN RANKIN, ET AL., : JUDGMENT ENTRY

Defendants-Appellants, : RELEASED 05/30/2012

APPEARANCES:

John Rankin, Williamsport, Ohio, pro se appellant.

Melissa N. Meinhart and Thomas G. Widman, Manley Deas Kochalski LLC, Columbus, Ohio, for appellee.

FRENCH, J.

{¶ 1} Defendant-appellant, John Rankin ("Rankin"), appeals the Pickaway

County Court of Common Pleas' order confirming a sheriff's sale in this foreclosure

action initiated by plaintiff-appellee, Fifth Third Mortgage Company ("Fifth Third"). Fifth

Third moves this court for an order granting leave to supplement the record and to

dismiss this appeal as moot. For the following reasons, we deny Fifth Third's motion

and affirm the trial court's judgment.

I. BACKGROUND

{¶ 2} On July 29, 2010, Fifth Third filed a complaint against Rankin and various

other defendants, requesting foreclosure on real property owned by Rankin and located

at 324 South Court Street, Circleville, Ohio. Rankin filed a pro se answer, and Fifth

Third subsequently moved for summary judgment. The trial court granted Fifth Third's Pickaway App. No. 11CA8 2

motion and issued a Judgment Entry and Decree in Foreclosure on December 6, 2010,

which this court affirmed. See Fifth Third Mtge. Co. v. Rankin, 4th Dist. No. 10CA45,

2011-Ohio-2757 ("Rankin I").

{¶ 3} On March 1, 2011, while Rankin I was pending in this court, the subject

property sold at sheriff's sale. The same day, Rankin, who was the highest bidder, filed

a motion to vacate the sheriff's sale for alleged noncompliance with the notice

requirements of R.C. 2329.26(A)(1). On April 8, 2011, the trial court entered a

Confirmation Entry of Sale and Distribution of Proceeds ("Confirmation Entry"), and, on

April 14, 2011, the trial court denied Rankin's motion to vacate the sheriff's sale. Rankin

filed a timely Notice of Appeal from the Confirmation Entry.

{¶ 4} On August 5, 2011, Fifth Third moved the trial court for a finding of

contempt to vacate the sheriff's sale and Confirmation Entry, for forfeiture of Rankin's

deposit, and to preclude Rankin from bidding at a future sheriff's sale, based on

Rankin's failure to remit the balance of the purchase price. The trial court granted Fifth

Third's motion the same day. Rankin appealed the August 5, 2011 order in Fifth Third

Mtge. Co. v. Rankin, 4th Dist. No. 11CA18 ("Rankin II").

II. MOTION TO DISMISS

{¶ 5} Fifth Third filed a motion to dismiss in case No. 11CA18, but clearly

intended the motion for this matter, case No. 11CA8. In its motion, Fifth Third states

that this court granted it leave during oral argument, held April 17, 2012, to file a motion

to dismiss. The April 17, 2012 oral argument was for case No. 11CA8. Fifth Third also

argues that Rankin's assignments of error regarding the propriety of the Confirmation

Entry, as set forth in case No. 11CA8, are moot because the trial court subsequently Pickaway App. No. 11CA8 3

vacated the Confirmation Entry. Finally, Fifth Third had already filed a motion to dismiss

in case No. 11CA18. We therefore consider this motion as a motion to dismiss case

No. 11CA8.

{¶ 6} Concurrently with this decision, this court has granted Fifth Third's motion

to dismiss case No. 11CA18, based on the trial court's lack of jurisdiction to vacate the

sheriff's sale and Confirmation Entry while Rankin's appeal from the Confirmation Entry

was pending in case No. 11CA8. In addition to dismissing case No. 11CA18, our order

in that case vacates the trial court's August 5, 2011 order. Accordingly, the trial court's

Confirmation Entry remains in effect, and the matter before us here, case No. 11CA8, is

not moot. For these reasons, we deny Fifth Third's motion to supplement the record

and dismiss this appeal.

III. ASSIGNMENTS OF ERROR

{¶ 7} We now turn to the merits of Rankin's appeal. Rankin asserts the

following assignments of error:

1. The Trial Court erred by issuing the Confirmation Entry * * * and thereby created a collapse of due process by failing to require a strict adherence to [R.C.] 2329.26(A)(1)(a)(ii).

2. The Trial Court erred by issuing the Confirmation Entry * * * and thereby created a failure of due process by ignoring the requirement of complete service under [R.C.] 2329.26(A)(1)(a)(i).

3. The Trial Court erred by issuing the Confirmation Entry * * * and thereby created a failure of due process by refusing to set aside the sale as required by [R.C.] 2329.27(B)(1).

Because all of Rankin's assignments stem from the trial court's decision to confirm the

sheriff's sale, we address the assignments of error together.

IV. DISCUSSION Pickaway App. No. 11CA8 4

{¶ 8} R.C. Chapter 2329 sets forth procedures for executing against property.

The following provisions are relevant to the parties' arguments in this case.

{¶ 9} R.C. 2329.26(A)(1) sets forth written notice requirements applicable to

sales of land on execution, as follows:

(A) Lands and tenements taken in execution shall not be sold until all of the following occur:

(1)(a) Except as otherwise provided in division (A)(1)(b) of this section, the judgment creditor who seeks the sale of the lands and tenements or the judgment creditor's attorney does both of the following:

(i) Causes a written notice of the date, time, and place of the sale to be served in accordance with divisions (A) and (B) of Civil Rule 5 upon the judgment debtor and upon each other party to the action in which the judgment giving rise to the execution was rendered;

(ii) At least seven calendar days prior to the date of the sale, files with the clerk of the court that rendered the judgment giving rise to the execution a copy of the written notice described in division (A)(1)(a)(i) of this section with proof of service endorsed on the copy in the form described in division (D) of Civil Rule 5.

Division (A)(2) of that section requires the officer taking lands and tenements to give

public notice of the date, place, and time of the sale by publication.

{¶ 10} R.C. 2329.31 governs confirmation of foreclosure sales and provides, in

relevant part, as follows:

(A) Upon the return of any writ of execution for the satisfaction of which lands and tenements have been sold, on careful examination of the proceedings of the officer making the sale, if the court of common pleas finds that the sale was made, in all respects, in conformity with sections 2329.01 to 2329.61 of the Revised Code, it shall, within thirty days of the return of the writ, direct the clerk of the court of common pleas to make an entry on the journal that the court is satisfied of the legality of such sale * * *. Pickaway App. No. 11CA8 5

{¶ 11} A trial court may set aside a sheriff's sale in accordance with R.C.

2329.27(A) or (B). R.C. 2329.26(B). As relevant here, R.C. 2329.27(B)(1) states as

follows:

Subject to divisions (B)(2) and (3) of this section, all sales of lands and tenements taken in execution that are made without compliance with the written notice requirements of division (A)(1)(a) of section 2329.26 of the Revised Code [and] the public notice requirements of division (A)(2) of that section * * * shall be set aside, on motion by any interested party, by the court to which the execution is returnable.

R.C. 2329.27(B)(3) addresses the effect of a confirmation of sale and provides, in

pertinent part, that a confirmation order is deemed to constitute a judicial finding, as

(i) That the sale * * * complied with the written notice requirements of division (A)(1)(a) of section 2329.26 of the Revised Code and the public notice requirements of division (A)(2) of that section * * *, or that compliance of that nature did not occur but the failure to give a written notice to a party entitled to notice under division (A)(1)(a) of section 2329.26 of the Revised Code has not prejudiced that party;

(ii) That all parties entitled to notice under division (A)(1)(a) of section 2329.26 of the Revised Code received adequate notice of the date, time, and place of the sale of the lands and tenements.

{¶ 12} "[I]t has long been recognized that the trial court has discretion to grant or

deny confirmation: 'Whether a judicial sale should be confirmed or set aside is within the

sound discretion of the trial court.' " Ohio Sav. Bank v. Ambrose, 56 Ohio St.3d 53, 55

(1990), quoting Michigan Mtge. Corp. v. Oakley, 68 Ohio App.2d 83 (1st Dist.1980),

paragraph two of the syllabus. The trial court's exercise of discretion "must be

bottomed upon the factual situations surrounding each sale." Merkle v. Merkle, 116

Ohio App. 370, 372 (4th Dist.1961). We review a trial court's decision to confirm or Pickaway App. No. 11CA8 6

vacate a sheriff's sale under an abuse of discretion standard. Commercial Fed. Mtge.

Corp. v. Sarson, 4th Dist. No. 00CA09 (Aug. 29, 2000); Hall v. Vance, 4th Dist. No.

08CA16, 2009-Ohio-4945, ¶ 10. "Thus, we must fully examine the proceedings to

determine their regularity and will only reverse the trial court's confirmation of the sale if

we determine that the trial court's confirmation was unreasonable, arbitrary or

unconscionable." Id. We are not free to merely substitute our judgment for that of the

trial court. Sarson.

{¶ 13} Rankin maintains that the trial court erred by confirming the sheriff's sale

because Fifth Third failed to comply with the notice requirements of R.C.

2329.26(A)(1)(a). Although he does not dispute his receipt of written notice, Rankin

argues that Fifth Third did not serve notice upon his legal counsel in accordance with

R.C. 2329.26(A)(1)(a)(i), pursuant to Civ.R. 5(B), which states that, when service is

required upon a party who is represented by an attorney of record in the proceedings,

service shall be made upon the attorney unless the court orders service upon the party.

With respect to R.C. 2329.26(A)(1)(a)(ii), Rankin also argues that Fifth Third failed to file

a copy of its Notice of Sale and proof of service with the clerk of court at least seven

days before the sale. Rankin contends that, absent compliance with the requirements

of R.C. 2329.26(A)(1)(a), confirmation constitutes a violation of his rights to due

process.

{¶ 14} Because Rankin inserts the concept of due process into each of his

assignments of error, we briefly address the requirements of due process before

addressing compliance with the requirements of R.C. 2329.26(A)(1)(a). "[T]he minimum

requirement of due process in any judicial deprivation of life, liberty or property is notice Pickaway App. No. 11CA8 7

and an opportunity to be heard appropriate to the case." Cent. Trust Co., N.A. v.

Jensen, 67 Ohio St.3d 140, 142 (1993), citing Mullane v. Cent. Hanover Bank & Trust

Co., 339 U.S. 306 (1950). In Jensen, at 143, the Supreme Court of Ohio recognized, in

the context of a foreclosure sale, that "notice at least by mail is a constitutional

prerequisite to a proceeding that adversely affects a property interest where the interest

holder's address is known or easily ascertainable." Thus, notice of a foreclosure sale

only by publication is insufficient to satisfy due process to a party to the foreclosure

action or a person having an interest therein whose address is known or easily

ascertainable. Id. at 144; but see PHH Mtge. Corp. v. Prater, 12th Dist. No. CA2010-

12-095, 2011-Ohio-3640, ¶ 15 (holding that Jensen is not so rigid as to forbid an

alternative form of notice, so long as the alternative is equally as reliable as mail).

{¶ 15} R.C. 2329.26(A)(1)(a)(i) codifies the due-process requirements recognized

in Jensen. See Beneficial Ohio, Inc. v. Primero, L.L.C., 166 Ohio App.3d 462, 2006-

Ohio-1566, ¶ 7 (1st Dist.). In opposition to Rankin's motion to vacate the sheriff's sale,

Fifth Third responded to Rankin's claim of noncompliance with R.C. 2329.26(A)(1)(a)(i)

by submitting a copy of its Notice of Sale, which contains a certificate of service

indicating that Fifth Third mailed the notice to Rankin personally and to all other parties

on February 17, 2011. Rankin does not dispute his receipt of the Notice of Sale, but

argues that Fifth Third failed to serve notice upon his attorneys.

{¶ 16} Although Rankin has acted pro se throughout the vast majority of these

proceedings, on January 31, 2011, attorneys Todd H. Neuman and Rick L. Ashton filed

a motion, on behalf of Rankin, for reconsideration of the trial court's denial of Rankin's Pickaway App. No. 11CA8 8

motion for a stay pending the appeal in Rankin I. Those attorneys also filed a reply in

support of that motion on February 11, 2011. Every other filing by Rankin was pro se.

{¶ 17} Fifth Third admits that its certificate of service does not indicate service of

the Notice of Sale upon Neuman and/or Ashton. Nevertheless, Fifth Third also

submitted to the trial court an email, dated February 17, 2011, addressed to Neuman

and Ashton. The email, signed by a paralegal for Fifth Third's attorney, acknowledged

the omission of the attorneys from the certificate of service and provided a copy of the

Notice of Sale as an attachment. Fifth Third also represented that it mailed a copy of

the Notice of Sale to Neuman and Ashton the same day, upon realizing it had not listed

them on the certificate of service.

{¶ 18} Rankin disputes that Fifth Third mailed a copy of the Notice of Sale to

Neuman and Ashton and contends that email service is insufficient under Civ.R. 5.

Upon the record before this court, however, we cannot conclude that the trial court

abused its discretion by determining that Fifth Third satisfied the requirements of R.C.

2329.26(A)(1)(a)(i). First, under Civ.R. 5(B), service upon a party's attorney of record is

a means of accomplishing service upon the party, and, here, it is undisputed that

Rankin, himself, was served via ordinary mail and had actual knowledge of the date,

time, and place of the sheriff's sale. Even assuming that Neuman and Ashton were

Rankin's attorneys of record for purposes beyond the motion they filed, this court has

held that service upon a party rather than upon the party's attorney, as required by

Civ.R. 5(B), is not fatal where the party has actual notice of the filings and attends the

noticed proceeding. See Schroeder v. Dailey, 4th Dist. No. 08CA0321, 2008-Ohio-

6100, ¶ 8 (holding that the appellant waived any argument related to service upon Pickaway App. No. 11CA8 9

herself, as opposed to upon her attorney, where she appeared pro se at subsequent,

scheduled hearings). Moreover, Rankin provided no evidence to contradict Fifth Third's

representation that it mailed notice to Neuman and Ashton on February 17, 2011. In

light of the actual service of the Notice of Sale upon Rankin, Fifth Third's assertion that it

emailed and mailed a copy of the Notice of Sale to Neuman and Ashton, and the lack of

evidence to contradict Fifth Third's assertion, the trial court acted within its discretion to

determine that Fifth Third satisfied the requirements of R.C. 2329.26(A)(1)(a)(i).

{¶ 19} Rankin next argues that the trial court erred by confirming and refusing to

vacate the sheriff's sale because Fifth Third did not file a copy of its Notice of Sale with

the clerk of court at least seven days before the sale, as required by R.C.

2329.26(A)(1)(a)(ii). It is undisputed that Fifth Third mistakenly mailed its Notice of Sale

to the Lucas County Court of Common Pleas for filing and did not file its Notice of Sale

with the trial court until it submitted a copy in opposition to Rankin's motion to vacate the

sheriff's sale. Nevertheless, Fifth Third argues that the trial court did not abuse its

discretion by confirming the sale because Fifth Third served actual notice to all parties

and their counsel, published notice in accordance with statutory requirements, and

attempted, in good faith, to file its Notice of Sale with the trial court. Fifth Third also

points out the trial court's awareness, prior to confirmation, that Rankin had been served

with notice of the sale and that the sale was properly advertised to the public.

{¶ 20} This court addressed the statutory basis for confirming a foreclosure sale

in Rak-Ree Ents., Inc. v. Timmons, 101 Ohio App.3d 12 (4th Dist.1995), where we

stated that R.C. 2329.31 "requires a careful examination of the proceedings leading to

the sale, and requires assurance that the sale was made, in all respects, in conformity Pickaway App. No. 11CA8 10

with the statutes." (Emphasis sic.) Id. at 18. In Rak-Ree, the advertisements for the

sheriff's sale incorrectly identified the sale date. While the sheriff sold the land at issue

on Tuesday, March 29, 1994, the first three advertisements listed the sale date as

Tuesday, March 28, 1993, whereas the fourth advertisement listed the date as Tuesday,

March 29, 1993. The appellant in Rak-Ree filed an unsuccessful motion to stay the sale

based on the publication errors and also unsuccessfully opposed a motion to confirm

the sale at a hearing prior to confirmation. We concluded that, under the circumstances

of that case, the trial court abused its discretion by confirming the sale.

{¶ 21} Despite Rankin's contention that Rak-Ree compels reversal here, we find

that case distinguishable, both on its facts and because a different statutory provision

was at issue. Rak-Ree involved a failure of the publication requirement of R.C.

2329.26(A)(2), as opposed to a judgment creditor's failure to file a copy of its notice of

sale with the clerk of court under R.C. 2329.26(A)(1)(a)(ii). In Rak-Ree, we recognized

the importance of advertising the date, time, and place of a sale to give the public notice

of the proposed sale. Id. at 17, citing Mellon Fin. Servs. Corp. #8 v. Russell, 11th Dist.

No. 90-A-1514 (Mar. 1, 1991). Our recognition is consistent with the primary goal of a

foreclosure sale–to protect the mortgagor's interest while ensuring that secured

creditors receive payment for unpaid debt. See Ambrose at 56. A corollary purpose is

to obtain the maximum amount of money from the sale, which is advanced by

maximizing the number of bidders at the sale. Id. R.C. 2329.26(A)(1)(a)(ii) serves a

different purpose of notifying the court of the judgment creditor's compliance with the

written notice requirements of R.C. 2329.26(A)(1)(a)(i) and does not as readily result in

prejudice to the judgment debtor. Pickaway App. No. 11CA8 11

{¶ 22} The record in Rak-Ree demonstrated that the appellant was prejudiced by

the errors in advertising the sale. In Rak-Ree, the appellant argued, prior to the sale

and again prior to confirmation, that the incorrect advertisements would confuse

potential buyers and affect the price that might be realized from the sale. Based in part

on the sale price obtained at the sheriff's sale in Rak-Ree, the trial court entered a

$45,000 deficiency judgment against the appellant. In part because this case involves a

different statutory requirement, the prejudice suffered by the appellant in Rak-Ree is not

present here, where Rankin had actual notice of the sale date, attended the sale, and

was the highest bidder on the property. Moreover, notice of the sale was properly

advertised to the public, as required by R.C. 2329.26(A)(2). Unlike in Rak-Ree, all

parties and the public were on notice of the date, time, and place of the sale, and the

absence of a filing in the trial court would not have negatively affected the sale price of

the property and prejudiced Rankin. The parties' filings prior to confirmation notified the

court that all interested parties had actual advance notice of the date, time, and place of

the sheriff's sale, such that the trial court could determine compliance with R.C.

2329.26(A)(1)(a)(i) despite the absence of a filing pursuant to R.C. 2329.26(A)(1)(a)(ii).

We conclude that Fifth Third's mistaken delivery of its notice to the wrong court did not

prejudice Rankin.

{¶ 23} Rankin maintains that, regardless of prejudice, R.C. 2329.27(B)(1)

mandates the vacation of a sheriff's sale absent strict compliance with R.C.

2329.26(A)(1)(a). While that statute states that all sales made without compliance with

the notice requirements of R.C. 2329.26(A)(1)(a) "shall be set aside, on motion by any

interested party," the rule is subject to R.C. 2329.26(B)(2) and (3). R.C. 2329.27(B)(3), Pickaway App. No. 11CA8 12

regarding the effect of a confirmation order, expressly contemplates that a trial court

may confirm a sale despite the lack of strict compliance with R.C. 2329.26(A)(1)(a).

R.C. 2329.27(B)(3)(a)(i) provides that confirmation constitutes either a judicial finding

that the sale complied with the requirements of R.C. 2329.26(A)(1)(a) "or that

compliance of that nature did not occur but the failure to give a written notice to a party

entitled to notice under [that section] has not prejudiced that party." Thus, lack of strict

compliance with R.C. 2329.26(A)(1)(a) does not render a confirmation order a per se

abuse of discretion. Rather, a trial court may clearly exercise its discretion to confirm a

sale where no prejudice results from a lack of specific compliance with the notice

requirements of R.C. 2329.26(A)(1)(a), and R.C. 2329.27(B)(1) does not eliminate that

discretion.

{¶ 24} Here, the Confirmation Entry constitutes a judicial finding that, although

Fifth Third did not comply with R.C. 2329.26(A)(1)(a)(ii), Rankin was not prejudiced by

the lack of compliance. As a result, R.C. 2329.27(B)(1) does not require that the

sheriff's sale be set aside. Additionally, other Ohio courts have held that " 'the final

order of confirmation, having the effect of a final conclusive judgment, cures all such

irregularities, misconduct, and unfairness in the making of the sale, departures from the

provisions of the decree of sale, and errors in the decree and the proceedings under

it.' " Citimortgage, Inc. v. Haverkamp, 12th Dist. No. CA2010-11-089, 2011-Ohio-2099,

¶ 17, quoting Peoples Liberty Bank & Trust Co. v. Cornett, 86 Ohio App. 222, 223-24

(1st Dist.1949).

{¶ 25} We have routinely noted that a trial court's discretion whether to confirm a

foreclosure sale must be evaluated in light of the factual circumstances of the particular Pickaway App. No. 11CA8 13

case, and a trial court's determination in that regard will be reversed only upon an abuse

of discretion. See Hall at ¶ 10. Ultimately, the record contains no facts from which we

may conclude that the trial court acted unreasonably, arbitrarily or unconscionably by

determining that confirmation was appropriate, despite the lack of specific compliance

with the filing requirement under R.C. 2329.26(A)(1)(a)(ii), where no prejudice arose as

a result and all parties had actual knowledge of the date, time, and place of the sheriff's

sale. Moreover, Rankin's undisputed notice of the sheriff's sale and his status as the

successful bidder at the sale precludes any finding of a due process violation with

respect to Fifth Third's compliance or noncompliance with the notification requirements

in R.C. 2329.26(A)(1)(a).

V. CONCLUSION

{¶ 26} For these reasons, we deny Fifth Third's motion to dismiss, overrule each

of Rankin's assignments of error, and affirm the judgment of the Pickaway County Court

of Common Pleas.

MOTION DENIED; JUDGMENT AFFIRMED. Pickaway App. No. 11CA8 14

JUDGMENT ENTRY

It is ordered that the MOTION IS DENIED and the JUDGMENT IS AFFIRMED. Appellant shall pay the costs.

The Court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate issue out of this Court directing the Pickaway County Common Pleas Court to carry this judgment into execution.

Any stay previously granted by this Court is hereby terminated as of the date of this entry.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. Exceptions.

* Brown, P.J. & Tyack, J.: Concur in Judgment and Opinion.

For the Court

BY: ________________________________ Judith L. French, Judge *

NOTICE TO COUNSEL

Pursuant to Local Rule No. 14, this document constitutes a final judgment entry and the time period for further appeal commences from the date of filing with the clerk.

* Susan D. Brown, P.J., Judith L. French, J., and G. Gary Tyack, J., of the Tenth Appellate District, sitting by assignment in the Fourth Appellate District.