Levin v. George Fraam & Sons, Inc.

585 N.E.2d 527, 65 Ohio App. 3d 841, 1 Ohio App. Unrep. 360, 1990 Ohio App. LEXIS 29
CourtOhio Court of Appeals
DecidedJanuary 10, 1990
DocketNo. 89CA004564.
StatusPublished
Cited by20 cases

This text of 585 N.E.2d 527 (Levin v. George Fraam & Sons, Inc.) 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
Levin v. George Fraam & Sons, Inc., 585 N.E.2d 527, 65 Ohio App. 3d 841, 1 Ohio App. Unrep. 360, 1990 Ohio App. LEXIS 29 (Ohio Ct. App. 1990).

Opinion

BAIRD, J.

This cause came before the court upon the appeal of Donald W. Dunham and Elizabeth Dunham from the summary judgment entered for the Marc Amy estate, for Frank K. Levin and for Arnold S. Levin on March 30,1989, and from the modified judgment entered on April 27,1989. Robert Levin as trustee for the Marc Amy trust, Frank K. Levin as trustee and in his individual capacity, and Arnold S. Levin also appeal, but only from the April 27th judgment entry. We reverse.

The trustees of the Marc Amy trust, Frank K. Levin and Arnold S. Levin (the plaintiffs), entered into a land installment contract with George Fraam and Sons, Inc. (Fraam Inc.) to sell certain real estate located in the City of Sheffield Lake. On October 1, 1985, the plaintiffs filed a three-count complaint against Fraam Inc. and two other parties. In count one of the complaint, the plaintiffs claimed that Fraam Inc. breached the installment contract by failing to pay in accordance with the schedule set forth in the contract and by failing to pay the taxes and assessments due on the real estate. The plaintiffs demanded a money judgment in the sum of $26,145.49 to be divided among them. The plaintiffs also demanded that the property subject to the contract be foreclosed to satisfy the judgment.

In the second count of the complaint, the plaintiffs alleged that Fraam Inc. sold a restaurant and liquor business to a third party in violation of the Bulk Sales Act. Pursuant to count two, the plaintiffs prayed for a lien to be placed upon the assets of the business and that the third party be enjoined from transferring or encumbering the assets of the restaurant business. Their demand further stated that if the sale of the property noted in count one was insufficient to pay the judgment, then the assets of the restaurant business should be sold to satisfy the plaintiffs' lien.

Count three, the subject of this appeal, described certain property owned by Fraam Inc. distinct from that noted in the first two counts of the complaint. In this count, the plaintiffs claimed that they were entitled to a lien on the property because of the fraudulent transfer of property that was alleged in count two. No separate cause of action was set forth in the third count as was set forth in each of the other two counts.

Upon the plaintiffs' motion for summary judgment, the trial court ruled in favor of the plaintiffs only on count one of the complaint. The trial court found that Fraam Inc. had breached the installment contract. The trial court ordered the contract cancelled and ordered the property described in count one foreclosed. Prior to the trial court's partial grant of summary judgment but after the filing of the complaint, Fraam Inc. conveyed the property described in count three to Donald and Elizabeth Dunham. The deed to the property was recorded six days before the trial court granted summary judgment.

On August 17, 1987, the plaintiffs filed a supplemental complaint setting forth the transfer of the property from Fraam Inc. to the Dunhams. Further the plaintiffs stated that the lis pendens statute applied, thus charging the Dunhams with notice of the pendency of the action and prohibiting them from acquiring any interest in the property. The plaintiffs demanded foreclosure of the property to satisfy the judgment lien that they had acquired by the trial court's grant of partial summary judgment on February 11, 1986.

*361 On October 30, 1987, the trial court awarded the plaintiffs summary judgment against Fraam Inc. and the third-party purchaser on count two and ordered that the restaurant business be foreclosed. The plaintiffs then proceeded to file a motion for summary judgment on the supplemental complaint. The Dunhams responded by filing their own motion for summary judgment.

The trial court ruled in favor of the plaintiffs on March 30, 1989, finding that they had liens on the Dunhams’ property in the following amounts:

$11,687.72 - Marc Amy Trust
$ 5,852.69 - Frank K. Levin
$ 5,852.69 - Arnold S. Levin

The trial court dismissed the Dunham's summary judgment motion. The Dunhams then moved for reconsideration of the trial court's decision. In their memorandum attached to their motion, the Dunhams claimed that on May 1,1986, they assigned the mortgage to the plaintiffs and had been continually paying on that mortgage until it was satisfied on April 27, 1989, in the amount $13,237.90. The Dunhams argued that to allow the plaintiffs to foreclose on the property would constitute double recovery because the plaintiffs have already received the mortgage payments. The trial court proceeded to modify its earlier decision. On April 27,1989, the court upheld the validity of the lien on the Dunhams' property, but ordered that the plaintiffs could not foreclose on the property because to do so would constitute a double recovery. The plaintiffs and the Dunhams appeal both the original grant of summary judgment and the court's subsequent modification.

DUNHAMS' ASSIGNMENT OF ERROR
"I. An invocation of the doctrine of lis pendens, pursuant to Ohio Rev. Code Ann. Section 2703.26 (Baldwin 1989), is legally justified only when there is due diligence with prosecution of timely commenced litigation, and where the defendant has the intent to defraud or avoid creditors. When evidence indicates that the lien was put on the subject real estate after complete payment of the sale proceeds to appellees, a summary judgment based on lis pendens is an abuse of discretion.
"II. The doctrine of lis pendens does not apply to real estate purchased by an innocent third party, when appellees received the entire proceeds from the sale of the property in question."

In their two assignments of error, the Dunhams question the trial court's application of the doctrine of lis pendens in determining the property rights of the parties. The common law doctrine of lis pendens has been codified in R.C. 2703.26 which reads:

"When summons has been served or publication made, the action is pending so as to charge third persons with notice of its pendency. While pending, no interest can be acquired by third persons in the subject of the action, as against the plaintiff's title."

The doctrine protects the plaintiff's interest in the property that is the subject of the litigation between the parties. If while the lawsuit on that property is pending, a third party acquires an interest in the property, that party takes subject to the final outcome of the suit. Dickerson v. Curtin (1947), 80 Ohio App. 486, 490. Thus, if the trial court awards the plaintiff rights in the property, the plaintiff takes free of any interest acquired by third parties during the lawsuit. The Foundation S. & L. Co. v. Rosenbaum (1960), 113 Ohio App. 501, 502.

In Cook v. Mozer (1923), 108 Ohio St. 30, 36, the Supreme Court of Ohio explained the doctrine:

"The general rule is that one not a party to a suit is not affected by the judgment.

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Cite This Page — Counsel Stack

Bluebook (online)
585 N.E.2d 527, 65 Ohio App. 3d 841, 1 Ohio App. Unrep. 360, 1990 Ohio App. LEXIS 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/levin-v-george-fraam-sons-inc-ohioctapp-1990.