[Cite as Point E. Condominium Owners' Assn. v. Bilfield, 2025-Ohio-2142.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
POINT EAST CONDOMINIUM : OWNERS’ ASSOCIATION, : Plaintiff-Appellant/Cross- Appellee, : No. 113738 v. :
BRYAN S. BILFIELD, ET AL., :
Defendants-Appellees/ : Cross-Appellants.
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED IN PART, REVERSED IN PART, AND REMANDED RELEASED AND JOURNALIZED: June 18, 2025
Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-22-968731
Appearances:
Lester S. Potash; Reminger Co., L.P.A., Jonathan H. Krol, Brian D. Sullivan, and Brianna M. Prislipsky, for plaintiff- appellant/cross-appellee.
Bilfield & Associates, LLC, Murray D. Bilfield, and Anthony S. Farren, for defendants-appellees/cross- appellants. ANITA LASTER MAYS, J.:
Plaintiff-appellant/cross-appellee Point East Condominium
Association (the “HOA”) and defendants-appellees/cross-appellants Bryan S.
Bilfield (“Bryan”), Murray Bilfield (“Murray”), Lillian Bilfield (“Lillian”), and Sharon
S. Campbell formerly Sharon S. Bram (“Sharon”) (collectively the “Bilfields”) appeal
portions of the trial court’s rulings on the parties’ cross-motions for summary
judgment. After a thorough review of the case law and pertinent facts, the judgment
is affirmed in part and reversed in part.
I. Background and Facts
On October 2, 1995, Lillian acquired a condominium unit at Point
East Condominiums managed and operated by the HOA. The deed included a
condominium provision that provided as follows:
As part of the consideration for this Warranty Deed and in consideration of the inclusion of like covenants in all conveyances of other Units in the Point East Condominium, the Grantee, by acceptance of this deed, agrees for her and her heirs and assigns to and with the Grantor and his successors and assigns, for the benefit of the Grantor and of every person, firm or corporation who shall or may become the owner of or have any title derived immediately or remotely through or under the Grantor, his successors and assigns, to any unit of said Point East Condominium, to be bound by all the terms and conditions of the said Declaration and By-Laws and to include a covenant similar hereto in each and every subsequent conveyance or encumbrance of the above-described premises.
The benefits and obligations hereunder shall inure to the benefit of and be binding upon the respective successors, heirs, executors, administrators and assigns of the respective parties.
The unit served as Lillian’s personal residence for approximately 23
years. On December 12, 1996, Lillian quit-claimed a life estate to the unit to herself and a remainder interest to the Bilfields as tenants in common. On July 19, 2001,
Lillian executed an Adjustable-Rate Open-End Home Equity Conversion Mortgage
with a Condominium Rider, and an Adjustable-Rate Open-End Home Equity
Conversion Second Mortgage with Condominium Rider (collectively, “Reverse
Mortgage”) for $315,000 guaranteed by the United States Department of Housing
and Urban Development (“HUD”).1 The Bilfields’ signatures and initials also
appear on these documents. Under the Reverse Mortgage, Lillian would receive a
small monthly payment for life or until she had not resided in the unit for 12
consecutive months.
On January 22, 2019, Murray notified the HOA that Lillian moved to
an assisted living facility due to failing health and was unable to pay further
condominium fee assessments. As a Medicaid-supported patient, the nursing home
retained the majority of Lillian’s social security income. Murray informed the HOA
that a deed in lieu of foreclosure was in process with the Reverse Mortgage provider
and requested that based on Lillian’s 23 years of ownership, timely payment of dues,
and failing health, the HOA refrain from pursuing collection actions against her.
On May 30, 2019, Bryan recorded an irrevocable disclaimer under
R.C. 5815.36 with the Cuyahoga County Recorder disclaiming his remainder
1 A reverse mortgage enables senior citizens with home equity to withdraw a
portion of the equity to supplement their income, or to repair or purchase a home. There are no monthly principal and interest payments during the term. https://www.hud.gov/hud-partners/single-family-hecmhome accessed March 15, 2025. property interest in the unit. R.C. 5815.36 governs disclaimers of testamentary and
nontestamentary succession to real and personal property. On June 16, 2020,
Sharon and Murray followed suit.
On July 10, 2019, February 21, 2020, and December 11, 2020, the
HOA filed certificates of lien under R.C. 5312.12 for outstanding assessments due to
nonpayment of liens from February 2019 and thereafter. The liens were for
$6,559.09, $19,988.77, and $32,514.39, plus interest per R.C. 1343.01 and
subsequently accruing assessments.
On April 30, 2021, the HOA filed a “complaint for foreclosure” against
Lillian, her unknown spouse, the State of Ohio Department of Taxation, and the
United States of America in Point East Condominium Owners Assn. v. Bilfield,
Cuyahoga C.P. No. CV-21-947012 (“foreclosure case”).
Lillian passed away on January 4, 2022. A probate estate was not
opened. On January 18, 2022, the HOA filed an “amended complaint for foreclosure
against “Lillian Bilfield, et al. Defendants;” “unknown heirs, devisees, legatees,
executives and administrators, if any, of Lillian;” the “Bilfields (Bryan, Murray, and
Sharon) and others comprising Lillian’s and/or the Bilfield’s current, former and
unknown spouses, and the State of Ohio Estate Tax division.”
On August 16, 2022, approximately eight months after the amended
complaint was filed, the trial court warned that the foreclosure case may be
dismissed for failure to prosecute and a hearing was set for September 22, 2022. On September 19, 2022, the Bilfields filed a joint answer that denied
liability and asserted the irrevocable disclaimers as an affirmative defense, claiming
there was no testamentary or nontestamentary succession to ownership of the unit.
The September 22, 2022 evidentiary hearing on the foreclosure was held, and on
September 26, 2022, the magistrate’s foreclosure decision was issued. The decision
included the sums to be recovered by the creditors based on lien priorities and
granted an in rem judgment of $65,554.07 to the HOA with interest, court costs,
title work expenses, and attorney fees to be determined. The decision also found
that the State and the Bilfields disclaimed their interest in the unit. The trial court
adopted the decision on October 17, 2022.
On January 11, 2023, the confirmation of sale was journalized. HUD
held the first and best liens totaling $330,464 and, upon sale of the unit, received
the entire net sale proceeds of $137,500. The HOA recovered its court costs. The
confirmation of sale was journalized on January 11, 2023.
Meanwhile, also in the Cuyahoga County Court of Common Pleas,
seven days prior to the evidentiary hearing in the foreclosure case and 11 days prior
to the magistrate’s decision, on September 15, 2022, the HOA filed the instant case,
entitled “complaint for declaratory and monetary judgments” against the Bilfields
only (“instant case”).
The complaint referenced portions of the Declaration of
Condominium Ownership for Point East Condominium (“Declaration”) and the
accompanying preliminary judicial report documented interests of record regarding the unit. The HOA claimed sums due under the lien certificates, accrued
assessments, late fees, expenses, and attorney fees.
The HOA also requested a declaratory judgment that the Bilfields’
irrevocable disclaimers were invalid under R.C. 5815.36(J)(1). The statute provides
that a disclaimer is voided if the disclaimant “[a]ssigns, conveys, encumbers,
pledges, or transfers, or contracts to assign, convey, encumber, pledge, or transfer,
the property or any interest in it.” Id.2 The HOA argued that the Bilfields executed
the Reverse Mortgage prior to signing and recording the disclaimers, thus rendering
the disclaimers void. As a result, the HOA contended, upon Lillian’s death, the
Bilfields became jointly and severally liable based on their remainder interests for
all unpaid assessments levied, administrative late charges, and collection fees
including under the Declaration. The Bilfields maintain that the HOA’s conclusion
would arguably create a cloud on title.
The HOA prayed for (1) a declaration that the irrevocable disclaimers
were void; (2) a declaration that the Bilfields became liable as successor-grantees of
the unit and subject to the Declaration upon Lillian’s death; (3) judgment against
the Bilfields jointly and severally for the unpaid assessments, late charges, statutory
interest, attorney fees and costs; (4) and other equitable and just relief as deemed
by the trial court.
2 Bryan’s disclaimer was dated May 9, 2019, and recorded May 30, 2019. Sharon and Murray’s disclaimers were dated June 8, 2020, and recorded June 16, 2020. The pending foreclosure case was not referenced in the complaint.
The Bilfields contended the HOA purposefully concealed the filing of the instant case
at the foreclosure case evidentiary hearing and failed to dispute the validity of the
Bilfields irrevocable disclaimers.
The Bilfields answered and counterclaimed for (1) a declaratory
judgment that Article XI(H) of the Declaration is substantively unconscionable
and/or void against public policy; and (2) the HOA’s breach of fiduciary duties to
Lillian by arbitrarily and inconsistently enforcing the Declaration by engaging in
“self-dealing” and “self-serving” conduct. Affirmative defenses included res judicata
and collateral estoppel.
The parties moved for summary judgment by filing four dispositive
motions:
1. Plaintiff Point East Condominium Association’s Motion for Summary Judgment, filed February 6, 2023; Plaintiff’s Supplement to Motion for Summary Judgment, filed November 29, 2023; and Defendants’ Brief in Opposition, filed February 8, 2024.
2. Defendants’ Motion for Summary Judgment on Plaintiff’s Complaint, filed December 27, 2023; Plaintiffs Brief in Opposition, filed January 19, 2024; and Defendants’ Reply Brief, filed February 2, 2024.
3. Defendants’ Motion for Summary Judgment on its Counterclaims, filed December 27, 2023; Plaintiffs Brief in Opposition, filed January 23, 2024; and Defendants’ Reply Brief, filed February 15, 2024.
4. Plaintiffs Motion for Summary Judgment on Defendants’ Counterclaims, filed December 27, 2023; Defendants’ Brief in Opposition filed, January 26, 2024; and Plaintiffs Reply Brief, filed February 2, 2024.
Journal Entry No. 176637251 (Mar. 5, 2024) Order and Opinion, p. 1. II. Trial Court’s Judgment
Upon due consideration of the parties’ motions, the trial court
determined the following:
A. Irrevocable disclaimers
The Bilfields “did not have the right to disclaim their interest in
Unit 810. R.C. 5815.36(J) expressly states that a disclaimant’s right to disclaim is
barred if he contracts to encumber the property.” Id. at p. 3-4. The Bilfields
contracted to encumber the property by executing the reverse mortgages and
condominium riders on July 19, 2001. Thus, the Bilfields are bound by the
Declaration and Bylaws. The doctrines of res judicata, collateral estoppel and waiver
did not apply to the foreclosure case decision on the disclaimer because the court
did not make a finding regarding the validity of the disclaimers, but stated only that
the Bilfields as well as the State of Ohio disclaimed their interest in the property. Id.
at p. 4-5.
B. Unpaid assessments
The doctrine of res judicata serves as a complete bar to the HOA’s
claims in the instant case. As a valid, final judgment rendered upon the merits, it
barred all subsequent actions based upon any claim arising out of the transaction or
occurrence that was the subject matter of the previous action. The HOA knew
during the foreclosure case that Lillian passed before the HOA amended the
complaint in that action to add the Bilfields. The HOA also knew the Bilfields were
title holders of the unit and allegedly responsible under the Declaration. “Plaintiff should have brought these claims in the foreclosure action.” Journal Entry No.
176637251 (Mar. 5, 2024), Order and Opinion, p. 6.
C. Counterclaims
The Bilfields failed to provide evidence that Declaration Article XI(H)
was procedurally or substantively unconscionable and thus unenforceable. The trial
court rejected the Bilfields’ breach of fiduciary duty claim based on this court’s
holding that a condominium association’s board owed a fiduciary duty to the
association but not to individual members of the association. Wood v. Cashelmara
Condo. Unit Owners’ Assn., 2022-Ohio-1496 (8th Dist.). Journal Entry No.
176637251 (Mar. 5, 2024), Order and Opinion, p. 7.
D. Synopsis of grant or denial
The HOA “is entitled to judgment as a matter of law under Civ.R.
56(C) only as to the Declaratory Judgment claim.” The Bilfields’ ‘‘irrevocable
disclaimers are null and void.” The HOA’s “Summary Judgment Motion is denied
as to all other claims.” Id. at p. 8.
The Bilfields “are entitled to judgment as a matter of law. . . as to [the
HOA’s] claims for unpaid assessments and fees pursuant to the doctrine of Res
Judicata.” Id. The Bilfields’ summary judgment motion is denied “as to the
Declaratory Judgment claim regarding the irrevocable waivers.” Id.
On the Bilfields’ counterclaims, the HOA “is entitled to judgment as a
matter of law under Civ.R. 56(C)” and the Bilfields’ “Motion for summary Judgment
on its Counterclaims is denied.” Id. III. Appeals.
The parties appeal the trial court’s summary judgment findings
addressed herein.
A. Standard of review
An appellate court’s review of summary judgment rulings is de novo,
applying the same standard as the trial court. Grafton v. Ohio Edison Co., 1996-
Ohio-336. Pursuant to Civ.R. 56, summary judgment is appropriate when no
genuine issue exists as to any material fact and, in viewing the evidence most
strongly in favor of the nonmoving party, reasonable minds can reach only one
conclusion that is adverse to the nonmoving party, entitling the moving party to
judgment as a matter of law.
Under a motion for summary judgment, the moving party carries an
initial burden of identifying specific facts in the record that demonstrate their
entitlement to summary judgment. Dresher v. Burt, 1996-Ohio-107. If the moving
party fails to meet this burden, summary judgment is not appropriate; if the moving
party meets this burden, the nonmoving party has the reciprocal burden to point to
evidence of specific facts in the record demonstrating the existence of a genuine
issue of material fact for trial. Id. at 293. If the nonmoving party fails to meet this
burden, summary judgment is appropriate. Id.
IV. The HOA’s Direct Appeal
A. Assignment of error
I. Where a lien holder may independently and separately sue in equity to foreclose, sue at law directly on the debt, or bring an action in ejectment, the trial court erred when holding that res judicata precludes plaintiff’s suit on the debt where there had been a previous action in foreclosure.
The trial court granted the HOA’s motion for summary judgment
declaring that the irrevocable disclaimers filed by the Bilfields were void under
R.C. 5815.36(J) and that the Bilfields were liable for the unpaid assessments as
grantees of the property. However, the trial court’s grant of the Bilfields’ cross-
motion for summary judgment finding that the doctrine of res judicata applies
serves as a complete bar to the HOA’s recovery in this case.
The HOA denies that res judicata applies, stating that “an action on a
debt and an action to foreclose a mortgage are two different beasts, which are not
required to be brought in a single action.” Third Fed. Savs. Bank v. Cox, 2010-Ohio-
4133 (8th Dist.). The Bilfields counter that the HOA’s status as a lienholder is not
equivalent to that of a foreclosing mortgagee. A lienholder, the Bilfields assert, is
required to pursue all potential claims against the debtor and may not, as a general
creditor, divide its foreclosure claim, an action in equity, and later file a separate
action at law to collect the underlying debt. The HOA disagrees and offers that “both
constitute a security interest in and to real estate which become ‘subject to the
payment of debts, and liable to be taken on execution and sold as provided in section
2329.02 to 2329.61 of the Revised Code.’ R.C. 2923.01(A).”
The foreclosure case was filed by the HOA to initiate the sale of the
Unit and allow recovery of the sums claimed on the recorded lien certificates and
other amounts purportedly allowed for unpaid condominium expenses and assessments. The HOA named Lillian, her unknown spouse, the State of Ohio
Department of Taxation and United States of America as defendants. The Bilfields
were not named parties though their interests and recorded disclaimers were clearly
listed in the preliminary judicial report that accompanied the complaint.3
Lillian passed on January 4, 2022. The HOA filed the “amended
complaint for foreclosure adding new party defendants” on January 18, 2022,
including the Bilfields and Lillian’s unknown or potential heirs as defendants —
information known from the inception of the case. The HOA argues it “did not seek
a monetary judgment from the Defendants [in the foreclosure case]; rather it sought
to have the Defendants set forth any claim or interest they had or may have in and
to” the unit or be barred. The amended complaint sought a monetary judgment
against decedent Lillian plus interest; that all defendants answer and set forth any
claim to the unit or be forever barred; that all liens be declared valid, marshaled and
the unit sold pursuant to law; costs, attorneys fees or a judgment for same; and “any
additional relief to which it may be entitled at law or in equity, including, but not
limited to additional unpaid common property expenses, assessments, and other
charges incurred subsequent to the filing of the within action.”
The foreclosure magistrate’s decision specified that the case was
submitted and heard upon the (1) amended complaint of the HOA, (2) answer of
3 A preliminary judicial report lists the “record owner of real property, a legal
description of the parcel of land, and a listing of all interests in the property that appear of record. See R.C. 2329.191(B).” U.S. Bank N.A. v. Columbia Park East MHP, L.L.C., 2018-Ohio-5234, ¶ 11 (8th Dist.). the State of Ohio Department of Taxation “disclaiming any interest,” (3) the answer
of defendant State of Ohio Estate Tax Division “disclaiming any interest,” (4) the
answer of defendant United States of America, (5) the answer of defendant Lillian
“now deceased,” (6) the joint answer of the Bilfields filed on September 19, 2022,
(7) the HOA’s motion for default judgment, and (8) “the evidence.” Thus, the
Bilfields’ interests and disclaimers were part of the record from the inception of the
case and referenced in the evidence considered by the foreclosure court.
The foreclosure decision set forth the lien priorities upon sale of the
property, indicated that the HOA’s judgment was in rem, and specified that the
Bilfields and the State of Ohio disclaimed any interest in the Unit. The Bilfields
argue that in addition to the evidence in the record, there was an evidentiary hearing
on the foreclosure issues and interests. For these reasons, the Bilfields offer that the
conclusion of the trial court in the instant case that the foreclosure court did not
make a finding regarding the validity of the disclaimers is unsupported.
There are two judgments that are appealable in foreclosure actions:
the order of foreclosure and sale and the order of confirmation of sale. Fidelity.
Bank, N.A. v. Unknown Heirs of Bowyer, 2023-Ohio-611, ¶ 9 (8th Dist.), citing
CitiMortgage, Inc. v. Roznowski, 2014-Ohio-1984, ¶ 39. The foreclosure order
“determines the extent of each lienholder’s interest, sets out the priority of the liens,
determines the other rights and responsibilities of each party, and orders the
property to be sold by sheriff’s sale.” Id., citing id. The proper means to challenge the court’s determination in the
foreclosure order is to appeal. Once the foreclosure order is final and the appellate
process concluded, a party may no longer challenge the rights and responsibilities
of the parties set forth in the foreclosure order. Id., citing id.
The HOA did not file objections to the magistrate’s decision or appeal
the foreclosure judgment. The foreclosure decree expressly advises: “A party shall
not assign as error on appeal the court’s adoption of any factual finding or legal
conclusion, whether or not specifically designated as a finding of fact or conclusion
of law under Civ. R. 53(D)(3)(a) (ii), unless the party timely and specifically objects
to that factual finding or legal conclusion as required by Civ. R. 53(D)(3)(b).”
Instead of filing an appeal one week before the scheduled foreclosure
hearing, while the case was still pending before a court of competent jurisdiction,
the HOA filed the instant suit seeking to recover under the lien certificates and
Declaration.
‘“As between [state] courts of concurrent jurisdiction, the tribunal whose power is first invoked by the institution of proper proceedings acquires jurisdiction, to the exclusion of all other tribunals, to adjudicate upon the whole issue and to settle the rights of the parties.’” State ex rel. Racing Guild of Ohio v. Morgan (1985), 17 Ohio St.3d 54, 56, 476 N.E.2d 1060, quoting State ex rel. Phillips v. Polcar, 50 Ohio St.2d 279 (1977) syllabus.
Third Fed. Sav. Bank v. Cox, 2010-Ohio-4133, ¶ 10 (8th Dist.).
The rule does not apply if
(1) the cause of action in both cases differ, or (2) the parties in both cases differ. State ex rel. Shimko v. McMonagle, 92 Ohio St.3d 426, 429, 2001-Ohio-301, 751 N.E.2d 472. Thus, “if the first case does not involve the same cause of action or the same parties as the second case, the first case will not prevent the second.” Id.
Id. Despite the commonalities, the HOA did not seek to consolidate the actions.
This court agrees that the foreclosure court’s final judgment in this
case serves as res judicata. As the trial court explained:
Pursuant to the doctrine of Res Judicata, a valid, final judgment rendered upon the merits bars all subsequent actions based upon any claim arising out of the transaction or occurrence that was the subject matter of the previous action. Grill v. Artistic Renovations, 106 N.E.3d 934, 2018-Ohio-747 (8th Dist.). It is well established under Ohio law that an existing final judgment or decree between the parties to litigation is conclusive as to all claims which were or might have been litigated in a first lawsuit. Id. “The doctrine of Res Judicata requires a plaintiff to present every ground for relief in the first action, or forever be barred from asserting it.” (Citations omitted.) Natl. Amusements, Inc. v. City of Springdale, 53 Ohio St.3d 60, 558 N.E.2d 1178, 1180 (1990).
In considering a claim under res judicata,
it must be determined whether: (1) there is a final, valid decision on the merits by a court of competent jurisdiction; (2) the second action involves the same parties or their privies as the first; (3) the second action raises claims that were or could have been litigated in the first action; and (4) the second action arises out of the transaction or occurrence that was the subject matter of the previous action. Lenard v. Miller, 2013 Ohio App. LEXIS 4933, 2013-Ohio-4703, ¶ 27 (8th Dist.)
Journal Entry No. 176637251 (Mar. 5, 2024), p. 5.
The trial court correctly recognized:
The Court finds that there was a final, appealable judgment of the merits of the foreclosure action after a full and fair opportunity to litigate all issues; Plaintiff and Defendants were all parties in the foreclosure action; Plaintiffs claims as to personal liability for the unpaid assessments could have been litigated in the foreclosure action; and Plaintiffs claims arise out of the same transaction or occurrence as the foreclosure action. Plaintiff knew that Lillian Bilfield had passed away before filing its Amended Complaint in the foreclosure action which added Defendants as parties to the case. Additionally, Plaintiff knew that Defendants were title holders to the property, and responsible for the assessments and fees pursuant to the Point East Condominium Association Declaration of Condominium Ownership. Plaintiff should have brought these claims in the foreclosure action. As such, the doctrine of Res Judicata prevents Plaintiffs from pursuing these claims against Defendants.
The trial court’s judgment is affirmed. The first assignment of error
is overruled.
V. The Bilfields’ Cross-Appeal
The Bilfields assign two errors on cross-appeal.
I. The trial court committed error prejudicial to the appellees when it ruled that the irrevocable disclaimers executed by the appellees were null and void and appellees are bound by the Point East Condominium Association Declaration and Bylaws.
II. The trial court committed errors prejudicial to the appellees when it ruled that without specific evidence appellees could not prove that the last sentence in Article XI(H) is unconscionable, violates Ohio contract law and is not enforceable against the appellees.
A. Disclaimers and declaration
The Bilfields argue that the trial court’s holding that the disclaimers
were null and void under R.C. 5815.36(J) and, as a result, the Bilfields are bound by
the Declaration, is in error. This court agrees.
The trial court rejected the Bilfields’ argument that the issues of the
validity of the disclaimers and enforceability of the Declaration were barred by the
doctrines of res judicata, collateral estoppel, and waiver. The trial court opined:
A review of the foreclosure action reveals that the Court did not make a finding that the irrevocable disclaimers were valid, rather, the Court found that Defendants disclaimed their interest in the property. The same finding was made as to the State of Ohio, who was also a defendant in the case and did not file an irrevocable disclaimer. Because the Court did not make a finding regarding the validity of the irrevocable disclaimer[s], the doctrines of Res Judicata, Collateral Estoppel, and Waiver do not apply.
As discussed in this court’s analysis of the HOA’s assignment of error,
the foreclosure court based its decision and order on a broad record. The Bilfields’
disclaimers were included in the preliminary judicial reports submitted with the
original and amended foreclosure complaints and set forth in the Bilfields’ answer
and affirmative defenses. The foreclosure decision provides that, “the Magistrate
finds that the following Defendants disclaimed any interest in the within property:
. . . Bryan S. Bilfield . . . Murray D. Bilfield . . . Sharon Campbell.” (Emphasis added.)
Also, as the trial court explained in the instant case, it is clear from
the record that the HOA knew of the Bilfields’ interest in the property and alleged
responsibility for the assessments and fees and the grounds therefore, including the
Declaration — “Plaintiff should have brought these claims in the foreclosure action.”
There were no objections posed to the magistrate’s decision or appeal of the
foreclosure judgment. Based on the record before this court, we find that the
foreclosure court did, in fact, make a finding regarding the validity of the
disclaimers in that case. Thus, the issue is barred by res judicata and the trial court’s
judgment that the disclaimers are invalid is reversed.
The first cross-assignment of error is sustained. B. Declaration unconscionability, enforceability, legality
The Bilfields challenge the trial court’s findings that the Bilfields
could not prove that the last sentence in Article XI(H) is unconscionable, the
Declaration does not violate Ohio law, and the Declaration is enforceable against the
Bilfields are in error.
This court’s finding that res judicata applies to the HOA’s claims in
this case including the disclaimers and, correspondingly, the Declaration renders
the second cross-assignment of error moot. App.R. 12(A)(1)(c).
VI. Conclusion
The trial court’s judgment of res judicata is affirmed, and plaintiff-
appellant/cross-appellee HOA’s first assignment of error is overruled. The first
cross-assignment of error of defendants-appellees/cross-appellants, the Bilfields, is
sustained and the trial court’s judgment that the disclaimers are invalid and the
Declaration is binding on the Bilfields is reversed as it is barred by the doctrine of
res judicata. The second cross-assignment of error is rendered moot by this court’s
findings on the first assigned errors on direct-appeal and on cross-appeal.
Judgment affirmed in part, reversed in part, and remanded.
It is ordered that defendants-appellees/cross-appellants recover from
plaintiff-appellant/cross-appellee costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue 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.
__________________________ ANITA LASTER MAYS, JUDGE
EILEEN A. GALLAGHER, A.J., CONCURS; KATHLEEN ANN KEOUGH, J., CONCURS IN JUDGMENT ONLY IN PART AND DISSENTS IN PART (WITH SEPARATE OPINION)
KATHLEEN ANN KEOUGH, J., CONCURRING IN JUDGMENT ONLY IN PART AND DISSENTING IN PART:
I would affirm the trial court’s decision outright. Accordingly, I
respectfully dissent with the majority’s resolution regarding the first cross-
assignment of error in which the Bilfields assert that the trial court erred in declaring
their irrevocable disclaimers invalid. The majority decision agrees with the Bilfields,
finding that the foreclosure court made a finding on the validity of the disclaimers,
and thus res judicata barred the HOA’s existing cause of action seeking to declare
the Bilfields’ irrevocable disclaimers invalid. I respectfully disagree.
I agree with the trial court that the foreclosure court did not make any
legal conclusion about the validity of the Bilfields’ disclaimers, but only made a
finding that the Bilfields disclaimed their interest in the property. The validity of
the disclaimers was not an issue raised before the foreclosure court, nor was it
necessary for the HOA to obtain foreclosure on the property. I would affirm the trial
court’s decision finding that the Bilfields’ irrevocable disclaimers were invalid
pursuant to R.C. 5815.36(J), which prohibits disclaimer when the disclaimant encumbers the property or any interest in it. When the Bilfields executed the reverse
mortgages and condominium riders in July 2001, this encumbered the property.
Accordingly, I would affirm the trial court’s decision concluding that the Bilfields’
disclaimers were invalid because the property was still encumbered by the reverse
mortgages and condominium riders at the time the Bilfields’ executed the
disclaimers.
Although I would find that the disclaimers were invalid, does this
determination now allow the HOA to pursue and obtain a judgment against the
Bilfields in this separate action? The answer is no, and thus I agree with the
majority’s decision that res judicata prevents the HOA’s present action. The cases
cited by the HOA in support of their position that separate actions can be brought at
separate times are distinguishable because those cases involved instances where the
parties were not in privity with each other, see, e.g., Cox, 2010-Ohio-4133 (8th
Dist.), Huntington Bank v. Michel, 2017-Ohio-9404 (7th Dist.), or where statutory
law allowed for a subsequent action to collect a personal judgment, Mathews v.
Cooper, 2021-Ohio-2768 (8th Dist.). Accordingly, although these cases
demonstrate that a party may in some instances bring a subsequent legal action
following a foreclosure action, none of those situations are applicable to the facts
herein.
Moreover, although R.C. 5311.18 permitted the HOA to foreclosure on
the lien in the same manner as a mortgage on real property, there is no promissory
note in this action to allow for a separate action solely seeking a money judgment. Accordingly, unlike in typical promissory note and mortgage foreclosures, the HOA
did not have a separate instrument to base its separate action. The Bilfields’
obligation arose based on a lien authorized by statute and operation of the
Declaration and Bylaws itself, that was subsequently filed with the recorder’s office
as a certificate of lien. Whether the HOA could have exercised any other type of
action as permitted by the Declaration and Bylaws has not been raised and thus not
before this court.
As the majority concluded, the HOA had knowledge of the Bilfields’
interest and liability and thus could have sought a personal judgment in the
foreclosure action. At the time the foreclosure complaint was filed, by virtue of the
judicial report, the HOA knew that (1) it was junior lien holder and thus did not have
a priority lien on the property; (2) the Bilfields, as tenants in common, were owners
of the property; (3) the Bilfields were attempting to disclaim their interest in the
property; and (4) the Bilfields encumbered the property by executing the reverse
mortgage. Based on this knowledge, the HOA could reasonably suspect that (1) the
proceeds from the judicial sale of the property would not cover the outstanding
assessments; and (2) the Bilfields would attempt to disclaim any interest and
liability in the property.
Despite this information, the HOA did not seek personal judgments
against the Bilfields for the unpaid assessments in the foreclosure action. The HOA
sought a personal judgment against Lillian for the unpaid assessments and then
continued to seek a personal judgment against her even after her death when the amended complaint was filed. In its amended complaint, the HOA still sought a
personal judgment against Lillian, now deceased, but it did not also seek a personal
judgment against the Bilfields. Rather, while the foreclosure action was still pending
(no determination on the merits of the foreclosure matter had yet to occur), the HOA
chose to file this separate action against the Bilfields, individually, seeking a
declaration of the validity of the disclaimers and a personal money judgment against
the Bilfields.