Ohio Farmers Ins. Co. v. Earles

2011 Ohio 3103

• Court: Ohio Court of Appeals
• Decided: June 20, 2011
• Docket: 2010CA00259
• Status: Published

Opinion

[Cite as Ohio Farmers Ins. Co. v. Earles, 2011-Ohio-3103.]

COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT

OHIO FARMERS INSURANCE JUDGES: COMPANY Hon. William B. Hoffman, P.J. Hon. Julie A. Edwards, J. Plaintiff-Appellant Hon. Patricia A. Delaney, J.

-vs- Case No. 2010CA00259

COLIN EARLES, ET AL. OPINION Defendant-Appellees

CHARACTER OF PROCEEDING: Appeal from the Stark County Court of Common Pleas

JUDGMENT: Reversed and Remanded

DATE OF JUDGMENT ENTRY: June 20, 2011

APPEARANCES:

For Plaintiff-Appellant For Defendant-Appellees

JEROME W. COOK AMELIA A. BOWER ERIN K. WALSH PLUNKETT COONEY MCDONALD HOPKINS LLC 300 East Broad Street Suite 590 600 Superior Avenue, East Columbus, Ohio 43215 Suite 2100 Cleveland, Ohio 44114-2653 Stark County, Case No. 2010CA00259 2

Hoffman, P.J.

{¶1} Plaintiff-appellant Ohio Farmers Insurance Company appeals the June 30,

2010 Judgment Entry of the Stark County Court of Common Pleas entering partial

summary judgment in favor of Defendant-appellees Colin and Monika Earles, Brian and

Traci Miller, Steven and Michele Sehmer, Steven and Mary Ann James, Chad and Mary

Hecky, First Place Bank and Third Federal Savings & Loan Association.

STATEMENT OF THE FACTS AND CASE

{¶2} This case is one of a number of interrelated cases filed in the Stark

County Court of Common Pleas, some of which have been assigned to different trial

court judges and some of which have already made their way to this Court for review.

We offer the following brief summary as background.

{¶3} On July 29, 2004, John Hershberger, acting as president of Danbury Glen

Estates, Inc., filed with the Stark County Recorder a notice of commencement for

improvements to real property pursuant to R.C. 1311.04. At the time, Danbury Glen

Estates, Inc. was the owner of the real estate to be developed later described in the

affidavit for mechanic's lien at issue.

{¶4} On April 4, 2006, Hersh Construction, one of the principal builders for the

project, executed a note in favor of Fifth Third Bank in the amount of $1,552,800.00,

plus interest. To secure the note, Hersh Construction executed a mortgage on twenty-

one (21) lots of the Danbury Glen Estates development.

{¶5} Appellant Ohio Farmers served as the performance bond surety for

Northern Valley Contractors, Inc. Northern Valley Contractors, Inc., assignor to

Appellant Ohio Farmers, became involved in the development project and performed Stark County, Case No. 2010CA00259 3

work on the streets and the sanitary sewer system. On February 28, 2007, Northern

Valley filed an affidavit for a mechanic's lien with the Stark County Recorder. The

affidavit of mechanic's lien included at least 46 lots in the development project. By

virtue of the performance bond, Northern Valley subsequently assigned its rights under

its mechanics lien to Appellant Ohio Farmers.

{¶6} Northern Valley’s affidavit of mechanic's lien was served on March 2, 2007

on the following: John Hershberger, Danbury Glen Estates, Inc., Jody Hershberger, and

Hershberger Construction, Inc. Danbury Glen Estates LLC was named but not served

with a copy of the affidavit. Furthermore, lots owned by Danbury Glen Estates LLC,

Rural Investors LLC and Brian and Traci Miller were included in the affidavit. However,

the affidavit was not served on certain owners of record for lots which were acquired

prior to the filing of the mechanic’s lien.

{¶7} In August 2008, Hersh Construction filed a declaratory judgment action in

the Stark County Court of Common Pleas, under case number 2008 CV 3574,

challenging the validity of the Ohio Farmer’s Mechanic’s Lien on the property owned by

Danbury, Danbury Glen Estates, LLC, Hersh and Rural Investors, LLC.

{¶8} Multiple parties in case number 2008 CV 3574 filed motions for summary

judgment. The trial court therein entered an order concerning summary judgment. Ohio

Farmers, in lieu of an appeal in Case No.2008 CV 3574, entered into a resolution with

the other parties, resulting in a May 6, 2009 Stipulated Judgment Entry which

determined the mechanic's lien of 2/28/2007 was valid and would relate back to July 29,

2004, the notice of commencement. Stark County, Case No. 2010CA00259 4

{¶9} Prior to that litigation, Hersh had sold lots to Colin and Monika Earles,

Steven and Michelle Sehmer and Brian and Traci Miller. During the pendency of the

litigation, Hersh sold lots to Steven and Mary Ann James and Chad and Mary Hecky.

{¶10} Appellant filed the within action on July 15, 2009. The trial court granted

partial summary judgment in favor of Appellees Colin and Monika Earles, Brian and

Traci Miller, Steven and Michele Sehmer, Steven and Mary Ann James, Chad and Mary

Hecky, First Place Bank and Third Federal Savings & Loan Association and denied

summary judgment to Appellant via Judgment Entry of June 30, 2010.

{¶11} Appellant now appeals, assigning as error:

{¶12} “I. THE TRIAL COURT ERRED WHEN IT GRANTED PARTIAL

SUMMARY JUDGMENT TO DEFENDANTS-APPELLEES BRIAN AND TRACI MILLER

AND THEIR MORTGAGEE, FIRST PLACE BANK, AND DENIED SUMMARY

JUDGMENT TO OHIO FARMERS ON GROUNDS OF THE TRIAL COURT’S

DECLARATION THAT THE MECHANIC’S LIEN OF OHIO FARMERS WAS INVALID

AS TO THE LAND OF BRIAN AND TRACI MILLER, AND WHERE THE TRIAL COURT

FAILED TO CLARIFY OR RECONSIDER THAT DECLARATION, BASED UPON OHIO

FARMERS’ FAILURE TO IDENTIFY BRIAN AND TRACI MILLER AS OWNERS IN THE

MECHANIC’S LIEN AFFIDAVIT AND SERVE THEM, WHERE THERE WAS NO

DOCUMENTARY EVIDENCE PRESENTED BY BRIAN OR TRACI MILLER THAT

OHIO FARMERS ACTUALLY KNEW THAT THEY HAD BECOME OWNERS OF THE

PARCEL [i.e., ONE OF MANY AT ISSUE] JUST TWENTY-ONE DAYS PRIOR TO THE

RECORDING OF OHIO FARMERS’ MECHANIC’S LIEN. Stark County, Case No. 2010CA00259 5

{¶13} “II. THE TRIAL COURT ERRED WHEN IT GRANTED PARTIAL

SUMMARY JUDGMENT TO ALL DEFENDANTS-APPELLEES AND DENIED

SUMMARY JUDGMENT TO OHIO FARMERS ON GROUNDS OF THE TRIAL

COURT’S DECLARATION THAT THE MECHANIC’S LIEN OF OHIO FARMERS WAS

INVALID IN ITS TOTALITY, AND FAILED TO CLARIFY OR RECONSIDER THAT

DECLARATION, ON THE ERRONEOUS PREMISE THAT OHIO’S MECHANIC’S LIEN

LAW IMPOSES A STATUTORY OBLIGATION UPON MECHANIC’S LIEN CLAIMANTS

TO PERFORM A TITLE SEARCH AND PRESUMABLY UPDATE THAT TITLE

SEARCH TO THE VERY SECOND BEFORE RECORDING OF THE MECHANIC’S

LIEN, OR RISK FORFEITURE, AS A MATTER OF LAW, OF THEIR ENTIRE

MECHANIC’S LIEN AS TO ALL LAND DESCRIBED THEREIN, AS A RESULT OF ITS

FAILURE TO DISCOVER THE IDENTIFY OF ONE OWNER OF ONE PARCEL, NO

MATTER HOW RECENTLY THAT OWNER MAY HAVE ACQUIRED TITLE, NO

MATTER THAT THE MECHANIC’S LIEN IDENTIFIED ALL OWNERS AND OWNERS’

DESIGNEES IDENTIFIED IN THE NOTICE OF COMMENCEMENT [WHO OWNED

MANY SEPARATE PARCELS] AND THAT THESE OWNERS AND OWNERS’

DESIGNEES WERE SERVED WITH THE MECHANIC’S LIEN AFFIDAVIT.

{¶14} “III. THE TRIAL COURT ERRED WHEN IT GRANTED PARTIAL

SUMMARY JUDGMENT TO DEFENDANT-APPELLEES COLIN AND MONIKA

EARLES, CHAD AND MARY HECKY, STEVEN AND ANN JAMES, AND STEVEN AND

MICHELLE SEHMER AND THEIR MORTGAGEES, AND DENIED SUMMARY

DECLARATION, AND ITS FAILURE TO CLARIFY OR RECONSIDER THAT Stark County, Case No. 2010CA00259 6

DECLARATION, THAT OHIO FARMER’S MECHANIC’S LIEN WAS INVALID AS TO

THE PARCELS OWNED BY DEFENDANTS-APPELLEES COLIN AND MONIKA

EARLES, CHAD AND MARY HECKY, STEVEN AND ANN JAMES, AND STEVEN AND

MICHELLE SEHMER WHERE THE UNDISPUTED DOCUMENTARY EVIDENCE

PROVED THAT THAT THESE OWNERS ALL TOOK TITLE AND THE MORTGAGEES

TOOK THEIR MORTGAGORS AFTER THE RECORDING OF OHIO FARMERS’

MECHANIC’S LIEN AND THE OWNERS RECEIVED THEIR TITLES FROM HERCH

CONSTRUCTION, INC. WHO HAD BEEN IDENTIFIED IN OHIO FARMERS’

MECHANIC’S LIEN AND WHO HAD BEEN SERVED WITH THE MECHANIC’S LIEN

AFFIDAVIT.

{¶15} “IV. THE TRIAL COURT ERRED WHEN IT GRANTED PARTIAL

COURT’S DECLARATION THAT THE VALIDITY OF OHIO FARMERS’ MECHANIC’S

LIEN WAS SUBJECT TO COLLATERAL ATTACK BY ALL DEFENDANTS-

APPELLEES DESPITE THE TRIAL COURT’S FULL KNOWLEDGE OF TWO

PREVIOUS FINAL ORDERS BY THE STARK COUNTY COURT OF COMMON PLEAS

IN TWO SEPARATE CASES THAT SPECIFICALLY DECLARED THE VALIDITY AND

AMOUNT OF OHIO FARMER’S MECHANIC’S LIEN AND WHERE NO ALLEGATIONS

OR PROOF OF FRAUD OR LACK OF JURISDICTION WERE RAISED OR

SUPPORTED BY DEFENDANTS-APPELLEES BELOW.

{¶16} “V. THE TRIAL COURT ERRED WHEN IT GRANTED PARTIAL

SUMMARY JUDGMENT TO ALL DEFENDANTS-APPELLEES AND DENIED Stark County, Case No. 2010CA00259 7

SUMMARY JUDGMENT TO OHIO FARMERS WHERE THE TRIAL COURT REFUSED

TO RECOGNIZE THE RES JUDICATA EFFECT OF THE STIPULATED JUDGMENT

ENTRY IN STARK COUNTY COMMON PLEAS COURT CASE NO. 2008 CV 03574

RELATING TO THE VALIDITY AND AMOUNT OF OHIO FARMERS’ MECHANIC’S

LIEN ON THE VERY PARCELS THAT WERE TRANSFERRED BY HERSH

CONSTRUCTION, INC. DIRECTLY TO EACH OF THE DEFENDANTS-APPELLEES

AND UPON WHICH THE BANK DEFENDANTS-APPELLEES TOOK THEIR

RESPECTIVE MORTGAGES.

{¶17} “VI. THE TRIAL COURT ERRED WHEN IT DECLARED THAT THE

EFFECTIVE DATE OF THE AGREED JUDGMENT ENTRY, NUNC PRO TUNC, FILED

IN STARK COUNTY CASE NO. 2007-CVO-1663 [OVER WHICH JUDGE CHARLES

BROWN, NOT JUDGE FORCHIONE, HAD JURISDICTION] WAS EFFECTIVE FROM

THE DATE OF ITS FILING ON MAY 6, 2009 AND THAT ITS EFFECTIVE DATE DID

NOT RELATE BACK TO THE DATE OF THE AGREED JUDGMENT ENTRY THAT IT

WAS OBVIOUSLY INTENDED TO CLARIFY WHICH WAS FILED ON AUGUST 3,

2007.”

I, II, & III

{¶18} Appellant’s first three assigned errors raise common and interrelated

issues; therefore, we will address the arguments together.

{¶19} Summary judgment proceedings present the appellate court with the

unique opportunity of reviewing the evidence in the same manner as the trial court.

Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35, 36, 506 N.E.2d 212.

Therefore, we must refer to Civ.R. 56(C), which provides, in pertinent part: “Summary Stark County, Case No. 2010CA00259 8

judgment shall be rendered forthwith if the pleadings, depositions, answers to

interrogatories, written admissions, affidavits, transcripts of evidence in the pending

case, and written stipulations of fact, if any, timely filed in the action, show that there is

no genuine issue as to any material fact and that the moving party is entitled to

judgment as a matter of law. * * * A summary judgment shall not be rendered unless it

appears from the evidence or stipulation, and only from the evidence or stipulation, that

reasonable minds can come to but one conclusion and that conclusion is adverse to the

party against whom the motion for summary judgment is made, that party being entitled

to have the evidence or stipulation construed most strongly in the party's favor.”

{¶20} Pursuant to the above rule, a trial court may not enter summary judgment

if it appears that a material fact is genuinely disputed. The party moving for summary

judgment bears the initial burden of informing the trial court of the basis for its motion

and identifying those portions of the record that demonstrate the absence of a genuine

issue of material fact. The moving party may not make a conclusory assertion that the

nonmoving party has no evidence to prove its case. The moving party must specifically

point to some evidence which demonstrates that the nonmoving party cannot support its

claim. If the moving party satisfies this requirement, the burden shifts to the nonmoving

party to set forth specific facts demonstrating there is a genuine issue of material fact for

trial. Vahila v. Hall, 77 Ohio St.3d 421, 429, 1997–Ohio–259, 674 N.E.2d 1164, citing

Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, 662 N.E.2d 264.

{¶21} At issue herein is the validity of the mechanic’s lien filed by Northern

Valley Contractor’s Inc. now owned by Ohio Farmers. Stark County, Case No. 2010CA00259 9

{¶22} On October 21, 2008, Fifth Third Bank filed a complaint in Stark County

Common Pleas Case 2008 CV 4442 seeking judgment on the note, mortgage and

guarantee in this case. The complaint alleged Hersh had defaulted on a mortgage

granted to Fifth Third on twenty-one lots in the subdivision known as Danbury Glen

Estates. Appellant Ohio Farmers, as the surety for Northern Valley Contractors, Inc.,

filed a motion to intervene, seeking to protect a balance of more than $539,000.00 for

Northern Valley Contractors, Inc’s contracting work. The trial court granted the motion to

intervene.

{¶23} On February 2, 2010, Appellant Ohio Farmers filed the aforesaid

stipulated judgment entry of May 6, 2009, and the responses of Danbury Glen and

Hersh Construction to request for admissions from case number 2008 CV 3574.

{¶24} Upon reviewing the parties' briefing of the issues, the trial court granted

Fifth Third's motion for summary judgment and denied Ohio Farmer's motion for

summary judgment, concluding, inter alia, that the 2/28/07 affidavit of mechanic's lien

filed by Northern Valley Construction did not create a lien against the real estate in

question. The matter proceeded to appeal before this Court.

{¶25} Via Judgment Entry of April 11, 2011, this Court reversed and remanded

the decision of the trial court finding the owners’ name omissions did not render the

mechanics lien invalid as to the lot owners, including the Millers. Fifth Third Bank v.

Ohio Farmers Insurance Company, (April 11, 2011) Stark App. Case No.

2010CA00286. This panel agrees with our colleagues rationale and decision finding the

mechanics lien is valid.

{¶26} Appellant’s first three assignments of error are sustained. Stark County, Case No. 2010CA00259 10

IV, V, and VI

{¶27} In light of our disposition of Appellant’s Assignments of Errors I, II, and III,

we find any discussions of these assignments of error to be moot.

{¶28} The June 30, 2010 Judgment Entry of the Stark County Court of Common

Pleas is reversed, and the matter remanded for further proceedings in accordance with

the law and this opinion.

By: Hoffman, P.J.

Edwards, J. and

Delaney, J. concur

s/ William B. Hoffman _________________ HON. WILLIAM B. HOFFMAN

s/ Julie A. Edwards___________________ HON. JULIE A. EDWARDS

s/ Patricia A. Delaney _________________ HON. PATRICIA A. DELANEY Stark County, Case No. 2010CA00259 11

IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT

OHIO FARMERS INSURANCE : COMPANY : : Plaintiff-Appellant : : -vs- : JUDGMENT ENTRY : COLIN EARLES, ET AL. : : Defendant-Appellees : Case No. 2010CA00259

For the reason stated in our accompanying Opinion, the judgment of the Stark

County Court of Common Pleas is reversed, and the matter is remanded to that court

for further proceedings in accordance with the law and our Opinion. Costs to Appellees.

s/ William B. Hoffman _________________ HON. WILLIAM B. HOFFMAN

s/ Patricia A. Delaney _________________ HON. PATRICIA A. DELANEY