[Cite as Note Portfolio Advisor, L.L.C. v. Wilson, 2012-Ohio-2199.]
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION No. 97326
NOTE PORTFOLIO ADVISORS LLC PLAINTIFF-APPELLANT
vs.
ADRIENNE M. WILSON, ET AL. DEFENDANTS-APPELLEES
JUDGMENT: AFFIRMED
Civil Appeal from the Cuyahoga County Common Pleas Court Case No. CV-743325
BEFORE: S. Gallagher, J., Sweeney, P.J., and Keough, J.
RELEASED AND JOURNALIZED: May 17, 2012 ATTORNEYS FOR APPELLANT
Jason A. Whitacre Ted A. Humbert Laura C. Infante Law Offices of John D. Clunk Co., L.P.A. 4500 Courthouse Blvd., Suite 400 Stow, OH 44224
ATTORNEY FOR APPELLEES
Kenneth J. Freeman Kenneth J. Freeman Co., L.P.A. 515 Leader Building 526 Superior Avenue Cleveland, OH 44114-1903 SEAN C. GALLAGHER, J.:
{¶1} Plaintiff-appellant, Note Portfolio Advisors, LLC, appeals the decision of the
Cuyahoga County Court of Common Pleas that dismissed the case with prejudice. For
the reasons stated herein, we affirm.
{¶2} Appellant filed a foreclosure action against defendant-appellee, Adrienne M.
Wilson, on December 10, 2010.1 The complaint alleges that appellant is the owner and
holder of a promissory note on which Wilson had defaulted in payment. Appellant
claimed there remained an unpaid balance of $97,015.95 plus interest at the rate of 7.75
percent per annum from May 1, 2006, and sought judgment in said amount. Wilson filed
an answer that generally denied the allegations in the complaint.
{¶3} The note was executed on December 29, 2003, in favor of Homecomings
Financial Services Network, Inc. The mortgage was executed the same date in favor of
Mortgage Electronic Registration Systems, Inc., as nominee for Homecomings Financial,
Inc. After several transfers, the mortgage eventually was assigned to appellant on
November 17, 2009.
{¶4} On April 29, 2011, appellant filed a motion for summary judgment. In
opposing the motion, Wilson argued that a previous foreclosure action involving the same
1 The complaint also named the following as defendants: John Doe, unknown spouse, if any, of Adrienne M. Wilson; Arrow Financial Services, LLC, and Golderberg Companies, Inc. Appellant obtained a default judgment against the John Doe defendant and Arrow Financial Services, LLC. property and the same note and mortgage had been dismissed with prejudice. That action
had been brought by JPMorgan Chase Bank, a previous holder of the note and mortgage.
The dismissal entry indicated that the matter was resolved and the plaintiff had charged
off the loan. JPMorgan Chase Bank v. Wilson, Cuyahoga C.P. No. CV-619131 (Apr. 10,
2008). It was the second foreclosure action filed by JPMorgan Chase Bank, the first
having been dismissed without prejudice. JPMorgan Chase Bank v. Wilson, Cuyahoga
C.P. No. CV-600397 (Apr. 2, 2007). Within her response brief, Wilson requested that
the trial court dismiss the present action.
{¶5} On August 19, 2011, the trial court denied the motion for summary judgment
as moot and dismissed the case with prejudice. The trial court found the previous action
was brought by appellant’s predecessor-in-interest, involved the same instruments,
alleged the same default date, and alleged nearly the same unpaid principal balance. The
court determined that the claims raised in this action were barred by res judicata and that
the court lacked jurisdiction to further consider the complaint.2
{¶6} Appellant filed this appeal, raising the following assignment of error for our
review: “The trial court erred as a matter of law by dismissing the case with prejudice
and without notice to the dismissed party and by dismissing the case based upon a Civ.R.
8(C) affirmative defense that the appellee failed to raise.”
2 We note that this was not a dismissal for lack of subject matter jurisdiction as proferred by Wilson. {¶7} Ohio courts have recognized that a defendant may raise the affirmative
defense of res judicata for the first time on summary judgment. See Hillman v. Edwards,
10th Dist. No. 10AP-950, 2011-Ohio-2677, ¶ 18-19; E.B.P., Inc. v. 623 W. St. Clair Ave.,
LLC, 8th Dist. No. 93587, 2010-Ohio-4005, ¶ 29; Thayer v. Diver, 6th Dist. No.
L-07-1415, 2009-Ohio-2053, ¶ 34. Although Wilson did not raise res judicata in her
answer, the affirmative defense was set forth in her response to summary judgment. As
such, it was not waived.
{¶8} Nonetheless, appellant argues that it was the only party to file a dispositive
motion and that the trial court failed to provide notice of the court’s intent to dismiss the
action. We find no merit to this argument.
{¶9} Once a party files a motion for summary judgment, a trial court may sua
sponte grant summary judgment for a nonmoving party if (1) all relevant evidence is
before the court, (2) no genuine issue of material fact exists, and (3) the nonmoving party
is entitled to judgment as a matter of law. Todd Dev. Co. v. Morgan, 116 Ohio St.3d
461, 2008-Ohio-87, 880 N.E.2d 88, ¶ 16-17; Columbus v. Bahgat, 10th Dist. No.
10AP-943, 2011-Ohio-3315, ¶ 11; see also State ex rel. J.J. Detweiler Ents., Inc. v.
Warner, 103 Ohio St.3d 99, 2004-Ohio-4659, 814 N.E.2d 482, ¶ 13. As explained in
Todd at ¶ 17,
The reason for this exception is that the parties have had an opportunity to submit all evidence to the court, and the parties have notice that the court is considering summary judgment. As a result, neither party’s due process rights are violated. In reviewing an award of summary judgment to a nonmoving party, we apply a de novo
standard of review. Bahgat at ¶ 12.
{¶10} In this case, appellant filed a motion for summary judgment with the trial
court. Appellant submitted the relevant instruments and an affidavit establishing
Wilson’s default and the unpaid principal balance from May 1, 2006. Wilson responded
with the argument that the action was barred by res judicata and requested a dismissal of
the claims. Thus, appellant was on notice of Wilson’s defense. Wilson submitted
documents evincing the prior foreclosure actions brought by JPMorgan Chase Bank
against Wilson on the same mortgage and note and the same alleged default. The first
action was dismissed without prejudice; the second was dismissed with prejudice in a
journal entry reflecting that the parties had resolved the matter and the plaintiff had
charged off the loan. Appellant did not file a reply brief or otherwise dispute that res
judicata applied to the action.
{¶11} Summary judgment has been found appropriate where a successive
foreclosure action is barred by res judicata because it arises from the same note and
mortgage and same default as a prior action that was dismissed upon the merits. See U.S.
Bank Natl. Assn. v. Gullotta, 120 Ohio St.3d 399, 2008-Ohio-6268, 899 N.E.2d 987; U.S.
Bank, N.A. v. Gullotta, 5th Dist. No. 2010CA00181, 2011-Ohio-2235; see also Gordon v.
Figetakis, 9th Dist. No. 22589, 2005-Ohio-5181. Further, it has been recognized that res
judicata applies where there is privity between the parties to the cases and that an assignee
of an interest in a promissory note and mortgage is in privity with its assignor for purposes of res judicata. EMC Mtge. Corp. v. Jenkins, 164 Ohio App.3d 240,
2005-Ohio-5799, 841 N.E.2d 855
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[Cite as Note Portfolio Advisor, L.L.C. v. Wilson, 2012-Ohio-2199.]
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION No. 97326
NOTE PORTFOLIO ADVISORS LLC PLAINTIFF-APPELLANT
vs.
ADRIENNE M. WILSON, ET AL. DEFENDANTS-APPELLEES
JUDGMENT: AFFIRMED
Civil Appeal from the Cuyahoga County Common Pleas Court Case No. CV-743325
BEFORE: S. Gallagher, J., Sweeney, P.J., and Keough, J.
RELEASED AND JOURNALIZED: May 17, 2012 ATTORNEYS FOR APPELLANT
Jason A. Whitacre Ted A. Humbert Laura C. Infante Law Offices of John D. Clunk Co., L.P.A. 4500 Courthouse Blvd., Suite 400 Stow, OH 44224
ATTORNEY FOR APPELLEES
Kenneth J. Freeman Kenneth J. Freeman Co., L.P.A. 515 Leader Building 526 Superior Avenue Cleveland, OH 44114-1903 SEAN C. GALLAGHER, J.:
{¶1} Plaintiff-appellant, Note Portfolio Advisors, LLC, appeals the decision of the
Cuyahoga County Court of Common Pleas that dismissed the case with prejudice. For
the reasons stated herein, we affirm.
{¶2} Appellant filed a foreclosure action against defendant-appellee, Adrienne M.
Wilson, on December 10, 2010.1 The complaint alleges that appellant is the owner and
holder of a promissory note on which Wilson had defaulted in payment. Appellant
claimed there remained an unpaid balance of $97,015.95 plus interest at the rate of 7.75
percent per annum from May 1, 2006, and sought judgment in said amount. Wilson filed
an answer that generally denied the allegations in the complaint.
{¶3} The note was executed on December 29, 2003, in favor of Homecomings
Financial Services Network, Inc. The mortgage was executed the same date in favor of
Mortgage Electronic Registration Systems, Inc., as nominee for Homecomings Financial,
Inc. After several transfers, the mortgage eventually was assigned to appellant on
November 17, 2009.
{¶4} On April 29, 2011, appellant filed a motion for summary judgment. In
opposing the motion, Wilson argued that a previous foreclosure action involving the same
1 The complaint also named the following as defendants: John Doe, unknown spouse, if any, of Adrienne M. Wilson; Arrow Financial Services, LLC, and Golderberg Companies, Inc. Appellant obtained a default judgment against the John Doe defendant and Arrow Financial Services, LLC. property and the same note and mortgage had been dismissed with prejudice. That action
had been brought by JPMorgan Chase Bank, a previous holder of the note and mortgage.
The dismissal entry indicated that the matter was resolved and the plaintiff had charged
off the loan. JPMorgan Chase Bank v. Wilson, Cuyahoga C.P. No. CV-619131 (Apr. 10,
2008). It was the second foreclosure action filed by JPMorgan Chase Bank, the first
having been dismissed without prejudice. JPMorgan Chase Bank v. Wilson, Cuyahoga
C.P. No. CV-600397 (Apr. 2, 2007). Within her response brief, Wilson requested that
the trial court dismiss the present action.
{¶5} On August 19, 2011, the trial court denied the motion for summary judgment
as moot and dismissed the case with prejudice. The trial court found the previous action
was brought by appellant’s predecessor-in-interest, involved the same instruments,
alleged the same default date, and alleged nearly the same unpaid principal balance. The
court determined that the claims raised in this action were barred by res judicata and that
the court lacked jurisdiction to further consider the complaint.2
{¶6} Appellant filed this appeal, raising the following assignment of error for our
review: “The trial court erred as a matter of law by dismissing the case with prejudice
and without notice to the dismissed party and by dismissing the case based upon a Civ.R.
8(C) affirmative defense that the appellee failed to raise.”
2 We note that this was not a dismissal for lack of subject matter jurisdiction as proferred by Wilson. {¶7} Ohio courts have recognized that a defendant may raise the affirmative
defense of res judicata for the first time on summary judgment. See Hillman v. Edwards,
10th Dist. No. 10AP-950, 2011-Ohio-2677, ¶ 18-19; E.B.P., Inc. v. 623 W. St. Clair Ave.,
LLC, 8th Dist. No. 93587, 2010-Ohio-4005, ¶ 29; Thayer v. Diver, 6th Dist. No.
L-07-1415, 2009-Ohio-2053, ¶ 34. Although Wilson did not raise res judicata in her
answer, the affirmative defense was set forth in her response to summary judgment. As
such, it was not waived.
{¶8} Nonetheless, appellant argues that it was the only party to file a dispositive
motion and that the trial court failed to provide notice of the court’s intent to dismiss the
action. We find no merit to this argument.
{¶9} Once a party files a motion for summary judgment, a trial court may sua
sponte grant summary judgment for a nonmoving party if (1) all relevant evidence is
before the court, (2) no genuine issue of material fact exists, and (3) the nonmoving party
is entitled to judgment as a matter of law. Todd Dev. Co. v. Morgan, 116 Ohio St.3d
461, 2008-Ohio-87, 880 N.E.2d 88, ¶ 16-17; Columbus v. Bahgat, 10th Dist. No.
10AP-943, 2011-Ohio-3315, ¶ 11; see also State ex rel. J.J. Detweiler Ents., Inc. v.
Warner, 103 Ohio St.3d 99, 2004-Ohio-4659, 814 N.E.2d 482, ¶ 13. As explained in
Todd at ¶ 17,
The reason for this exception is that the parties have had an opportunity to submit all evidence to the court, and the parties have notice that the court is considering summary judgment. As a result, neither party’s due process rights are violated. In reviewing an award of summary judgment to a nonmoving party, we apply a de novo
standard of review. Bahgat at ¶ 12.
{¶10} In this case, appellant filed a motion for summary judgment with the trial
court. Appellant submitted the relevant instruments and an affidavit establishing
Wilson’s default and the unpaid principal balance from May 1, 2006. Wilson responded
with the argument that the action was barred by res judicata and requested a dismissal of
the claims. Thus, appellant was on notice of Wilson’s defense. Wilson submitted
documents evincing the prior foreclosure actions brought by JPMorgan Chase Bank
against Wilson on the same mortgage and note and the same alleged default. The first
action was dismissed without prejudice; the second was dismissed with prejudice in a
journal entry reflecting that the parties had resolved the matter and the plaintiff had
charged off the loan. Appellant did not file a reply brief or otherwise dispute that res
judicata applied to the action.
{¶11} Summary judgment has been found appropriate where a successive
foreclosure action is barred by res judicata because it arises from the same note and
mortgage and same default as a prior action that was dismissed upon the merits. See U.S.
Bank Natl. Assn. v. Gullotta, 120 Ohio St.3d 399, 2008-Ohio-6268, 899 N.E.2d 987; U.S.
Bank, N.A. v. Gullotta, 5th Dist. No. 2010CA00181, 2011-Ohio-2235; see also Gordon v.
Figetakis, 9th Dist. No. 22589, 2005-Ohio-5181. Further, it has been recognized that res
judicata applies where there is privity between the parties to the cases and that an assignee
of an interest in a promissory note and mortgage is in privity with its assignor for purposes of res judicata. EMC Mtge. Corp. v. Jenkins, 164 Ohio App.3d 240,
2005-Ohio-5799, 841 N.E.2d 855, ¶ 20 (9th Dist.).
{¶12} The record herein reflects that all relevant documents were before the court,
no genuine issue of material fact existed, and Wilson was entitled to judgment as a matter
of law. Although the trial court indicated that it was dismissing the action, rather than
granting summary judgment to the nonmoving party, the matter was effectively presented
and treated as a summary judgment matter. Thus, any error in this regard was harmless.
See EMC Mtge. Corp. at ¶ 11-12. Further, even if the trial court stated the wrong basis
for its decision, we have the authority to affirm the judgment if it is legally correct on
other grounds. See Joyce v. Gen. Motors Corp., 49 Ohio St.3d 93, 96, 551 N.E.2d 172
(1990). Accordingly, we overrule appellant’s sole assignment of error.
{¶13} Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the common
pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
SEAN C. GALLAGHER, JUDGE
JAMES J. SWEENEY, P.J., and KATHLEEN ANN KEOUGH, J., CONCUR