Home Loan Savings Bank v. Jahweh, L.L.C.

2023 Ohio 1166

• Court: Ohio Court of Appeals
• Decided: April 7, 2023
• Docket: 2022CA0033
• Status: Published

Opinion

[Cite as Home Loan Savings Bank v. Jahweh, L.L.C., 2023-Ohio-1166.]

COURT OF APPEALS COSHOCTON COUNTY, OHIO FIFTH APPELLATE DISTRICT

THE HOME LOAN SAVINGS BANK : JUDGES: : Hon. W. Scott Gwin, P.J. Plaintiff-Appellee : Hon. Patricia A. Delaney, J. : Hon. Andrew J. King, J. -vs- : : JAHWEH LLC, ET AL. : Case No. 2022CA0033 : Defendant-Appellant : OPINION

CHARACTER OF PROCEEDING: Appeal from the Court of Common Pleas, Case No. 18CI0418

JUDGMENT: Dismissed

DATE OF JUDGMENT: April 7, 2023

APPEARANCES:

For Plaintiff-Appellee For Defendant-Appellant

JAMES R. SKELTON BRIAN W. BENBOW 309 Main Street 265 Sunrise Center Drive Coshocton, OH 43812 Zanesville, OH 43701 Coshocton County, Case No. 2022CA0033 2

King, J.

{¶ 1} Defendant-Appellant Jahweh, LLC, et al appeals the November 17, 2022

judgment of the Coshocton County Court of Common Pleas which partially granted

Appellee The Home Loan Savings Bank's motion for summary judgment.

Facts and Procedural History

{¶ 2} This is the third time this matter has been before this court. On the first

occasion, in The Home Loan Savings Bank v. Jahweh LLC, et al, 5th Dist. Coshocton No.

2022CA0001, 2022-Ohio-1118 we outlined the facts and procedural history of this matter

to that point as follows:

{¶ 3} In October of 2018, appellee The Home Loan Savings Bank filed a

complaint seeking judgment on a guaranty/cognovit note. Home Loan filed a Statement

and Confession of Judgment with the complaint. On October 31, 2018 the trial court

issued a judgment on confession, awarding judgment in the amount of $977,471.46, plus

interest thereon at the rate of five percent per annum from October 3, 2018 against

defendants Jahweh, LLC, North Pointe Fitness Institute, LLC, and Phillip F. Arthur (herein

Jahweh). The clerk of courts issued notice of the judgment to all defendants via registered

mail, return receipt requested, but all three notices were returned unclaimed.

{¶ 4} On December 6, 2021, three years after issuance of the judgment, Jahweh

filed Defendants' Motion To Void The October 31, 2018 Judgment And To Dismiss The

Complaint. North Pointe, LLC and Phillip Arthur argued that they did not sign the note and

were therefore entitled to service of process. Because none was attempted, North Pointe,

LLC and Phillip Arthur argued the judgment against them should be vacated.

(Defendants' Motion To Void The October 31, 2018 Judgment And To Dismiss The Coshocton County, Case No. 2022CA0033 3

Complaint, Dec. 6, 2021, p. 2) Jahweh also argued that the note signed on behalf of

Jahweh, LLC was not a cognovit note because the boxes next to the language that would

create a cognovit note were not checked. Jahweh argued the parties did not agree to a

cognovit provision and the judgment must not stand.

{¶ 5} Jahweh further argued that Home Loan failed to present the underlying

promissory note or a running account, and offered insufficient evidence to pierce the

corporate veil and hold Phillip Arthur individually liable.

{¶ 6} The trial court found "there is only one guarantor on the note, and that

guarantor is Jahweh, LLC." (Judgment Entry, January 5, 2022, p. 1). The trial court

therefore found against Jahweh, LLC stating:

[T]he terms of the guarantee [sic] are unambiguous and clear, and

need no interpretation, and this Court must give effect to all of the

contract provisions. Sutton Bank v. Progressive Polymers, L.L.C.,

161 Ohio St.3d 387 (2020). The cognovit language also complies

with the statutory requirements set forth in R.C. 2323.13. Defendant

Jahweh argues that the boxes next to the relevant language were

not checked. However the contract is completely silent as to what

effect, if any, marking the box would have on the terms of the

contract. In addition, Defendant Jahweh cites no caselaw in support

of the proposition that the box must be checked for the cognovit

provisions to be enforceable. It is also beyond comprehension that a

businessman guaranteeing a note for $977,471.46 would Coshocton County, Case No. 2022CA0033 4

misunderstand the cognovit language or find that it was inconsistent

with the guarantee [sic] language on page two of the note.

{¶ 7} Jahweh's subsequent appeal argued the trial court's finding that the relevant

document was a cognovit note was error, and because the document was not a cognovit

note, the trial court lacked jurisdiction and its judgment was void.

{¶ 8} This court issued its opinion on March 31, 2022. We interpreted Jahweh's

motion in the trial court as a Civ.R. 60(B) motion for relief from judgment. We further found

the trial court erred as a matter of law in finding that the parties entered into a contract

containing a cognovit provision. Specifically, this court held:

We hold that Jahweh has filed a timely motion for relief from judgment and that its

assertion that the guaranty was not converted into a cognovit note supplies a

meritorious defense and that, therefor, the trial court abused its discretion by failing

to grant relief from judgment.

{¶ 9} The Home Loan Savings Bank v. Jahweh LLC, et al, 5th Dist. Coshocton

No. 2022CA0001, 2022-Ohio-1118 ¶ 32. We remanded the matter for proceedings

consistent with our opinion.

History Following Remand

{¶ 10} Herein, we focus on the pleadings related to the judgment entry appealed

from, specifically the November 17, 2022 judgment entry granting Home Loan's motion

for summary judgment as to counts 5 and 6 of Home Loan's amended complaint. Coshocton County, Case No. 2022CA0033 5

{¶ 11} On April 7, 2022, the trial court issued a judgment entry vacating its

judgment against all named defendants pursuant to this court's March 31, 2022 decision.

{¶ 12} Five days prior, on April 2, 2022, Home Loan filed a first amended complaint

seeking judgment on the promissory note and guaranty as well as additional claims.

Home Loan filed its complaint against Jahweh LLC, A.R Fountaine LLC, and North Pointe

Fitness Institute, LLC, companies owned in whole or in part by Phillip Arthur, as well as

Phillip Arthur individually. The complaint alleged in part that Jahweh had failed to make

any payment on the note since May 2021.

{¶ 13} Attached to its amended complaint, Home Loan included the promissory

note, the guaranty, and the payment history of the loan. The guaranty indicated a loan of

$966,400 was made to North Pointe Fitness Institute, LLC and was signed by guarantor

Phillip F. Arthur, Member of Jahweh, LLC. The promissory note was signed by Phillip F.

Arthur on behalf of North Pointe Fitness Institute, LLC and "Phillip F. Arthur, Member."

The payment history indicated Jahweh had made interest-only payments for most of the

life of the loan, but then on April 23, 2021, made a principal payment of $501,306.31.

Home Loan alleged no payment had been made thereafter.

{¶ 14} On April 7, 2022, Jahweh was served with the amended complaint.

{¶ 15} Relevant to this appeal are counts 5 and 6 of Home Loan's amended

complaint which allege appellants Phillip F. Arthur and North Pointe Fitness Institute, LLC

are in default on their promissory note and that appellant Jahweh LLC is in default of its

guaranty because no payments have been made on the loan since May of 2021. The

counts allege the named parties still owe $433,177.22 on the note plus interest, fees, and Coshocton County, Case No. 2022CA0033 6

costs, and that Home Loan has elected to enforce the guaranty for the entire balance

due.

{¶ 16} Relevant to this appeal, count 5 contains paragraphs 43 through 47, and

count 6 contains paragraphs 48 through 50.

{¶ 17} On April 5, 2022, Home Loan filed a Notice of Lis Pendens. It appears Home

Loan alleged its loan was leveraged by real estate owned by either Arthur or one of his

LLCs.

{¶ 18} On April 26, 2022, Jahweh filed a motion to strike the amended complaint,

and on May 12, 2022, the trial court denied the motion. Jahweh filed an appeal on May

18, 2022. On June 29, 2022, the appeal was dismissed for want of a final appealable

order. The Home Loan Savings Bank v. Jahweh LLC, et al, 5th Dist. Coshocton No.

2022CA0016.

{¶ 19} On July 5, 2022, Jahweh filed an answer and counter claim to Home Loan's

amended complaint. In its answer, Jahweh sequentially listed each paragraph of Home

Loan's complaint and denied the allegations contained in each. In what appears to be a

typographical error, the answer to paragraph 43 of the complaint on page 3 of the answer

and counter claim states "Defendants deny the allegations contained in paragraph 33 of

Plaintiff's Complaint." Paragraph 43 of Home Loan's first amended complaint alleged

Jahweh executed and delivered the promissory note to Home Loan. However, paragraph

51 of Jahweh's answer and counter claim states "Defendants deny any and all allegations

not specifically admitted herein."

{¶ 20} On July 13, 2022, Home Loan filed three documents; an answer to Jahweh's

counter claims, a motion for judgment on the pleadings as to Jahweh's counter claims, Coshocton County, Case No. 2022CA0033 7

and a motion for summary judgment. Home Loan's motion for summary judgment argued

in part that Jahweh failed to deny paragraph 43 of the amended complaint. At no point

did Jahweh amend its answer to paragraph 43.

{¶ 21} On July 26, 2022, Jahweh filed a motion to hold Home Loan's motion for

summary judgment and motion for judgment on the pleadings in abeyance pursuant to

Civ.R. 56(F). On August 17, 2022, the trial court granted the motion to allow Jahweh to

obtain discovery.

{¶ 22} On July 27, 2022, Jahweh filed a memorandum contra to Home Loan's

motion for judgment on the pleadings. At page 15 of the memorandum Jahweh stated:

At issue is the reply to Par. 43 of Plaintiff's Complaint which

Defendants answered as follows: "Defendants deny the allegations

contained in Paragraph 33 of Plaintiff's Complaint."

A read of the context of all the answers before and after this answer

shows it to be a simple typographical error. The intent to deny this

paragraph is apparent when reviewed in context.

{¶ 23} On July 28, 2022, Home Loan filed an amended affidavit by Thomas Conidi,

Executive Vice President and Director of Loan Administration of The Home Loan Savings

Bank. The Conidi affidavit set forth that Phillip Arthur and North Pointe Fitness Institute,

LLC are delinquent on their loan payments and Jahweh, LLC is delinquent on its guaranty.

The amended affidavit contained a correction to the actual remaining balance on the loan. Coshocton County, Case No. 2022CA0033 8

{¶ 24} On November 17, 2022, the trial court granted Home Loan's motion for

summary judgment as to counts 5 and 6 of its amended complaint and granted judgment

to Home Loan in the amount of $433,177.22 plus interest. It denied the motion for

summary judgment as to all other counts. The trial court noted the obvious and

correctable error in Jahweh's answer to paragraph 43. It stated "[T]he Court was not

previously inclined to treat the answer as a "gotcha" moment, and instead allow

Defendants to file an amended answer. However, four months have elapsed since the

answer was filed, and the issue of the failure to deny was raised by the Plaintiff on

September 21, 2022 * * *. Judgment Entry filed November 17, 2022 at page 2. The trial

court addressed none of Jahweh's counterclaims.

{¶ 25} As to Jahweh's motion contra to Home Loan's motion for summary

judgment, the trial court further found that while Home Loan's filing of an amended

complaint in this matter is "procedurally awkward * * * Ohio law allows for successive

foreclosure actions." Id. at 3.

{¶ 26} In its entry, the trial court certified there was no just cause for delay.

{¶ 27} Jahweh filed an appeal and the matter is now before this court for

consideration. Jahweh raises three assignments of error as follow:

I

{¶ 28} "THE TRIAL COURT ERRED AS A MATTER OF LAW IN GRANTING

APPELLEES’ MOTION FOR SUMMARY JUDGMENT AND BY NOT GRANTING

APPELLANT’S MOTION FOR SUMMARY JUDGMENT. APPELLEES’ CLAIMS ARE

BARRED BY APPLICATION OF THE LAW OF THE CASE DOCTRINE AND BY RES

JUDICATA." Coshocton County, Case No. 2022CA0033 9

II

{¶ 29} "THE TRIAL COURT ERRED AS A MATTER OF LAW IN IMPERMISSIBLY

DECIDING THIS CASE BASED UPON A FLAWED PERCEPTION OF A PLEADING

ERROR IN VIOLATION OF THE SUPREME COURT’S HOLDING IN STATE EX REL.

HUNTINGTON INS. AGENCY, INS. AGENCY, INC. V. DURYEE (1995), 73 OHIO ST.

3D 530."

III

{¶ 30} "THE TRIAL COURT LACKED PERSONAL JURISDICTION OVER

APPELLANT IN THAT APPELLEE NEVER SERVED APPELLANT. THERE IS NO

EVIDENCE IN THE RECORD TO SUPPORT THE TRIAL COURT’S FINDING THAT

APPELLANT EXPRESSLY WAIVED SERVICE THE TRIAL COURT THUS LACKED

SUBJECT MATTER JURISDICTION OVER APPELLEE’S COMPLAINT. THE TRIAL

COURT ACCORDINGLY COMMITTED PREJUDICIAL ERROR BY DENYING

APPELLANT’S MOTION TO VACATE THE OCTOBER 31, 2018 JUDGMENT ENTRY,

AS THAT JUDGMENT ENTRY WAS VOID FOR LACK OF PERSONAL JURISDICTION

OVER APPELLANT.

THE TRIAL COURT COMMITTED PREJUDICIAL ERROR IN NOT DISMISSING

APPELLEE’S COMPLAINT IN THAT APPELLEE NEVER COMMENCED ITS LAWSUIT

BY SERVING ANY PARTY WITHIN ONE YEAR OF FILING ITS COMPLAINT. THE

TRIAL COURT LACKED SUBJECT MATTER JURISDICTION OVER APPELLEE’S Coshocton County, Case No. 2022CA0033 10

COMPLAINT, AS THE CASE WAS NOT TIMELY COMMENCED UNDER CIV.R. 3(A).

THE TRIAL COURT’S RULING WAS THUS VOID AB INITIO."

I, II, III

{¶ 31} Before turning the arguments, we must first determine whether the

judgment entry appealed from is a final appealable order. We conclude there is no final

appealable order here. The requirements of both R.C. 2505.02 and Civ. R. 54(B) must be

met in cases involving multiple parties and multiple claims in order for the judgment at

issue to truly be a final appealable order. Cherry Lane Dev., L.L.C. v. Walnut Twp., 5th

Dist. Fairfield No. 10-CA-28, 2011-Ohio-425, ¶ 18. See also State ex rel. Scruggs v.

Sadler, 97 Ohio St.3d 78, 2002-Ohio-5315, 776 N.E.2d 101, ¶ 5.

{¶ 32} The broad purpose of Civ. R. 54(B) is to provide an exception to the state’s

long-standing policy against piecemeal adjudication and interlocutory appeals. Noble v.

Colwell, 44 Ohio St. 3d 92, 96, 540 N.E.2d 1381, 1385 (1989). Upon proper certification

under this rule, a trial court’s final judgment will become immediately appealable, while

matters involving other parties or claims remain pending before the trial court. Civ. R.

54(B). The rule itself requires that the certified matter be a final judgment, which is

consistent with requirements of Section 3(B)(2), Article 4 of the Ohio Constitution.

{¶ 33} Here, the trial court rendered summary judgment against Defendants

Jahweh, LLC, Northpointe Fitness, LLC, and Phillip Arthur in favor of Plaintiff Home Loan

Savings Bank on only counts five and six of Home Loan’s amended complaint. These

claims arose from the Defendants failure to pay a debt either as obligee or guarantor to

the underlying note. The remaining two tort claims, fraudulent conveyance, and unjust

enrichment claim appear to arise from Arthur's purported transfer of property allegedly Coshocton County, Case No. 2022CA0033 11

serving as collateral for the note. The trial court denied the motion for summary judgment

on those claims and ordered the three defendants to pay $433,177.22 with interest to

Home Loan.

{¶ 34} The trial court did not resolve any of the Defendant's counterclaims. In the

trial court’s 54(B) certification, it included the following statement "The Court finds that the

remaining claims should not be adjudicated without providing the opportunity for review

of this court’s decision granting summary judgment." But this court has previously held

that unresolved counterclaims or cross claims can prevent a judgment from becoming a

final appealable order, even when the entry includes the Civ. R. 54(B) certification. Alt v.

Bauer, 5th Dist. Richland No. 17CA97, 2018-Ohio-4264, ¶ 31. Thus, the court must

evaluate those pending counterclaims to determine if they "touch upon the very same

facts, legal issues and circumstances of the original claim." Id., ¶ 31. We turn to those

counterclaims now.

{¶ 35} Defendant's counterclaims include 10 counts. At least four of those counts

are relevant here. Count Two is a breach a contract; Count Three is an unjust enrichment

claim; Claim Four is a quantum meruit claim; and Count Ten is a declaratory judgment

claim. All four of these counts appear to arise out of the same factual and legal

circumstances -- i.e. the note or guaranty executed by the Defendants -- as the two counts

underlying the trial court’s partial summary judgment. The trial court’s express decision

not rule on these related claims means its partial summary judgment does not prevent

judgment as required by R.C. 2505.02(B)(1).

{¶ 36} Likewise, the partial summary judgment before us fails to determine the

action under R.C. 2505.02(B)(1). The judgment here fails to fully resolve the underlying Coshocton County, Case No. 2022CA0033 12

dispute surrounding the note, which is necessary. Reg'l Imaging Consultants Corp. v.

Computer Billing Servs., Inc., 7th Dist. Mahoning No. 00 CA 79, 2001-Ohio-3457, *6.

{¶ 37} Accordingly, there is no final appealable order and this court is without

jurisdiction to proceed. We therefore dismiss the appeal.

By King, J.

Gwin, P.J. and

Delaney, J. concur.

AJK/rw