Mann v. Resolution T Co., L.L.C.

2014 Ohio 2451
Ohio Court of Appeals·Decided June 6, 2014·No. 2014-CA-5·Published·Cited by 3 cases

Opinion

IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MIAMI COUNTY

DENNIS RAY MANN, et al.

Plaintiffs-Appellants v. RESOLUTION T COMPANY, LLC Defendant-Appellee

Appellate Case No. 2014-CA-5 Trial Court Case No. 13-471

(Civil Appeal from (Common Pleas Court)

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OPINION

Rendered on the 6th day of June, 2014.

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STEPHEN E. KLEIN, Atty. Reg. No. 0014351, 240 Bohanan Drive, Vandalia, Ohio 45377 Attorney for Plaintiffs-Appellants

DANIEL A. DEMARCO, Atty. Reg. No. 0038920, PHILLIP G. ECKENRODE, Atty. Reg. No. 0084187, 65 East State Street, Suite 1400, Columbus, Ohio 43215 Attorneys for Defendant-Appellee

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WELBAUM, J.

{¶ 1} In this case, Plaintiffs-Appellants, Dennis and Karen Mann (“the Manns”)

appeal from a judgment denying their motion for summary judgment and granting the cross-motion for summary judgment of Defendant-Appellee, Resolution T Company, LLC (“Resolution”). The Manns contend that the trial court erred in overruling their motion for summary judgment. In support of this proposition, the Manns make three arguments: (1) that the foreclosure decree in a prior case between the parties was not a final appealable order; (2) a pre-judgment taking of their sale proceeds in the foreclosure case pursuant to a contract claim for attorney fees violates public policy and R.C. 1319.02; and (3) that they are entitled to compensatory damages based on their slander of title claim.

{¶ 2} We conclude that the trial court did not err in rendering summary judgment on Resolution’s behalf regarding the claims that challenge attorney fees paid to Resolution in connection with a prior sale of the Manns’ property. The foreclosure decree was a final appealable order, and issues relating to attorney fees should have been raised in the foreclosure action, by way of appeal or a Civ.R. 60(B) motion for relief from judgment. These claims, therefore, are barred by res judicata.

{¶ 3} We further conclude that the trial court erred in rendering summary judgment on Resolution’s behalf with respect to the claim for slander of title. There are genuine issues of material fact concerning the slander of title claim, and whether Resolution acted in bad faith by refusing to remove a lien on the Manns’ property until after the Manns filed an action for slander of title. Accordingly, the judgment of the trial court will be affirmed in part, reversed in part, and remanded for further proceedings.

I. Facts and Course of Proceedings

{¶ 4} This case has a complicated procedural history, as it has spanned three separate actions filed in the Miami County Court of Common Pleas. The three cases arose from a cognovit note and mortgage signed by the Manns in 2003. In April of 2003, Dennis Mann signed a cognovit note, agreeing to pay Fifth Third Bank (“Fifth”) the sum of $65,000 by April 17, 2008. The note allowed any attorney, upon default, to appear on behalf of Dennis Mann and confess judgment in favor of Fifth. The note further agreed that Mann would pay attorney fees for the attorney taking these actions.

{¶ 5} On the same day, the Manns signed an open-end mortgage and security agreement giving Fifth a security interest in property owned by the Manns, in order to secure payment of the note. Article 5 of the mortgage agreement provided for remedies upon default, including acceleration and foreclosure. Article 5.3 of the agreement further stated that:

There shall be allowed and included as additional indebtedness secured by the lien of the Mortgage, to the extent permitted by law, all expenditures and expenses of Mortgagee for attorney fees, court costs, appraisers’ fees, sheriff’s fees, documentary and expert evidence, stenographers’ charges, publication costs and such other costs and expenses as Mortgagee may deem reasonably necessary to exercise any remedies or to evidence to bidders at any sale of the Property the true condition of the title to or the value of the Property. All such expenditures and expenses shall bear interest at a floating rate per annum equal to six percent (6%) in excess of the Prime Rate of Fifth Third Bank then in effect, and such interest shall be paid by Mortgagor upon demand by Mortgagee and shall be additional indebtedness secured by this Mortgage. Doc. #7, Defendant’s Memorandum in Opposition to Plaintiffs’ Motion for Summary Judgment and

Defendant’s Cross-Motion for Summary Judgment, Affidavit of Roger Kendrick, ¶ 4, and Ex. 2 attached to the Kendrick Affidavit, p. 9.

{¶ 6} In September 2009, Fifth assigned the note and mortgage to Resolution.

Subsequently, in July 2011, Resolution obtained judgment against the Manns on the cognovit note in Miami County Common Pleas Court Case No. 11-469 (“Cognovit Case”). The trial court did not order attorney fees to be paid, but ordered judgment in the amount still owing on the note, which was $56,394.44. The court also included court costs. In December 2011, Resolution attempted to execute on the Manns’ personal property, and court costs were designated in the praecipe as $248.66. Although a hearing was scheduled, it was not held due to uncertainty about whether the Manns had been served. Resolution filed another praecipe in February 2012, again listing the total costs as $248.66.

{¶ 7} After the Manns filed a motion for a hearing on the execution, the trial court held a hearing in March 2012, but took the matter under advisement because the parties were attempting to resolve the matter. Apparently, the parties were unable to do so, because Resolution then filed a foreclosure action seeking to foreclose on two parcels of property owned by the Manns. This action was designated as Miami County Common Pleas Court Case No. 12-465 (“Foreclosure Case”), and was assigned to a different judge than the one who had handled the Cognovit Case.

{¶ 8} On November 6, 2012, Resolution filed a motion for default and summary judgment in the Foreclosure Case, and the trial court granted a “Judgment Entry Decree of Foreclosure” on December 12, 2012. The court stated in the decree that:

As of July 11, 2011, pursuant to the Note, there is justly due and owing to

Plaintiff [Resolution] the total unpaid principal balance of the Note, in an amount not less than $56,394.44, plus: (1) attorneys’ fees, costs and charges incurred in the collection or enforcement thereof; and (2) all other amounts and charges due and owing under the Note (the “Note Balance”). Doc. #11, Certified Copy of Judgment Entry Decree of Foreclosure, p. 3.

{¶ 9} The court, therefore, ordered the property foreclosed and sold, and held that Resolution was entitled to an amount up to and including the note balance, as the second order of priority, after payment of amounts owed to the Miami County Treasurer. In addition, the court stated that:

It is further ORDERED, ADJUDGED, and DECREED that there may be due to Plaintiff [Resolution] additional sums advanced by it under the terms of the Loan Documents to pay real estate taxes, insurance premiums, property protection, and attorneys’ fees, which sums are to be determined by further Order and paid as a “Third Party” priority as provided hereinabove. Id. at p. 3.

{¶ 10} No appeal was taken from the foreclosure order, and a foreclosure sale was set for February 27, 2012. The minimum bid at the sale was to be $50,000. Prior to the time the foreclosure order was filed, the Manns contracted with Kenneth Hatton, a licensed real estate broker, to find a buyer for the property.

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Mann v. Resolution T Co., L.L.C., 2014 Ohio 2451 (Ohio Ct. App. 2014).

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