Trumbull Twp. Bd. of Trustees v. Rickard

2017 Ohio 6945

• Court: Ohio Court of Appeals
• Decided: July 24, 2017
• Docket: 2016-A-0061
• Status: Published

Opinion

[Cite as Trumbull Twp. Bd. of Trustees v. Rickard, 2017-Ohio-6945.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT

ASHTABULA COUNTY, OHIO

TRUMBULL TOWNSHIP : OPINION BOARD OF TRUSTEES, : Plaintiff-Appellant, : CASE NO. 2016-A-0061 - vs - : LAWRENCE RICKARD, et al., : Defendant-Appellee.

Civil Appeal from the Ashtabula County Court of Common Pleas, Case No. 2011 CV 1081.

Judgment: Reversed and remanded.

Nicholas A. Iarocci, Ashtabula County Prosecutor, and Catherine R. Colgan, Assistant Prosecutor, Ashtabula County Courthouse, 25 West Jefferson Street, Jefferson, OH 44047-1092 (For Plaintiff-Appellant).

Grant J. Keating, and Erik L. Walter, Dworken & Bernstein Co., L.P.A., 60 South Park Place, Painesville, OH 44077 (For Defendant-Appellee).

THOMAS R. WRIGHT, J.

{¶1} Appellant, the Board of Trumbull Township Trustees (Township), appeals

the trial court’s judgment entries entering foreclosure and granting summary judgment in

part. We reverse. {¶2} In November 2011, Geauga Savings Bank (GSB) filed a complaint for

foreclosure against appellee, Lawrence Rickard, pursuant to his assumption of a loan

agreement, based on Rickard’s nonpayment and against Bryce R.T. Seymour and

Christine Seymour, whose mortgage Rickard assumed. The Township was not a party

to the suit.

{¶3} In 2014, GSB filed a motion for summary judgment against Rickard and

the Seymours seeking foreclosure and money damages based on Rickard’s default.

{¶4} After the parties’ competing motions and briefs were filed regarding

summary judgment, but before the trial court issued its decision, the Township was

substituted as the plaintiff in place of GSB on January 5, 2016 pursuant to GSB’s

assignment of Rickard’s assumption agreement, mortgage, and note.

{¶5} On July 29, 2016, the trial court granted the Township summary judgment

as to foreclosure and reformation of the legal description and ordered the Township to

produce a judgment entry of foreclosure within 30 days. However, it denied summary

judgment on GSB’s request for attorney fees as well as its request for a hearing on the

issue. The trial court later issued its judgment entry of foreclosure on September 9,

2016.

{¶6} The Township asserts one assigned error:

{¶7} “The trial court erred by committing plain error as a matter of law and

abusing its discretion in overruling the request for a hearing on the issue of attorney

fees and the request for attorney fees where the note had been purchased and the

mortgage assumed by the township, defendant had waived any defense except as to

amount and reasonableness of attorney fees, and Local Rule 26 requires a hearing.”

2 {¶8} The Township argues the trial court committed plain error or abused its

discretion in not granting it a hearing on its request for attorney fees pursuant to GSB’s

motion.

{¶9} Plain error is defined as error seriously affecting “the basic fairness,

integrity, or public reputation of the judicial process, thereby challenging the legitimacy

of the underlying judicial process itself.” Goldfuss v. Davidson, 79 Ohio St.3d 116, 679

N.E.2d 1099 (1997), syllabus.

{¶10} “In applying the doctrine of plain error in a civil case, reviewing courts

must proceed with the utmost caution, limiting the doctrine strictly to those extremely

rare cases where exceptional circumstances require its application to prevent a

manifest miscarriage of justice, and where the error complained of, if left uncorrected,

would have a material adverse effect on the character of, and public confidence in,

judicial proceedings.” Id. at 121.

{¶11} “‘* * * [T]he term “abuse of discretion” is one of art, connoting judgment

exercised by a court, which does not comport with reason or the record.’ State v.

Underwood, 11th Dist. No. 2008–L–113, 2009-Ohio-2089, 2009 WL 1177050, ¶ 30,

citing State v. Ferranto, 112 Ohio St. 667, 676–678, 148 N.E. 362 (1925). * * *[A]n

abuse of discretion is the trial court's ‘failure to exercise sound, reasonable, and legal

decision-making.’ State v. Beechler, 2d Dist. No. 09–CA–54, 2010-Ohio-1900, 2010

WL 1731784, ¶ 62, quoting Black's Law Dictionary (8 Ed.Rev.2004) 11. When an

appellate court is reviewing a pure issue of law, ‘the mere fact that the reviewing court

would decide the issue differently is enough to find error (of course, not all errors are

reversible. Some are harmless; others are not preserved for appellate review). By

contrast, where the issue on review has been confined to the discretion of the trial court,

3 the mere fact that the reviewing court would have reached a different result is not

enough, without more, to find error.’ Id. at ¶ 67.” Ivancic v. Enos, 11th Dist. Lake No.

2011-L-050, 2012-Ohio-3639, 978 N.E.2d 927, ¶70.

{¶12} GSB’s motion for summary judgment alleges Rickard was in default and

owed it in excess of $50,000, plus interest, late charges, advanced escrow, and

attorney fees in the amount of $36,985. The motion also asked the court to correct a

scrivener’s error. GSB’s motion included the affidavit of Michael Delczeg, a GSB

account manager, and attached copies of the pertinent legal agreements. Delczeg’s

affidavit states in part that Rickard owed GSB $36,985 in attorney fees.

{¶13} Rickard responded and asked the court to deny summary judgment in light

of GSB’s unsupported and unreasonable request for attorney fees. Rickard did not

concede that GSB is entitled to attorney fees, but instead argued that genuine issues of

fact remain precluding summary judgment.

{¶14} In response, GSB asked the court to grant it partial summary judgment on

the other issues and hold an evidentiary hearing on the sole remaining issue of attorney

fees. Rickard disagreed in his sur-reply and opposed GSB’s request for an evidentiary

hearing as unnecessary and unwarranted claiming the bank had ample opportunity to

present the necessary evidence establishing its lawyer’s hourly rate and detailed billing

to establish that its claimed attorney fees were reasonable and actually incurred in this

case.

{¶15} There was a long delay between GSB’s filing its motion for summary

judgment and the trial court’s decision granting it in part, and in the meantime, the

Township was substituted in place of GSB as the plaintiff. Upon becoming a party, the

4 Township did not file a motion or brief indicating its position or requesting relief with

regard to the pending summary judgment motion, but relied wholly on GSB’s filings.

{¶16} The trial court subsequently granted the Township summary judgment on

all issues except attorney fees. It explained:

{¶17} “[GSB] requested attorney fees in its Motion for Summary Judgment.

Pursuant to Judgment Entry dated January 5, 2016, [GSB] was replaced as plaintiff by

substitution of Trumbull Township Board of Trustees. This substitution occurred as part

of a settlement agreement between [GSB] AND the Trumbull Township Board of

Trustees which resulted in Geauga Savings Bank assigning the mortgage to the

Trumbull Township Board of Trustees. Geauga Savings Bank is no longer a party to

this action. As a result, the request for attorney fees is overruled, as is the request for a

hearing on the issue.”

{¶18} The Township now argues that as GSB’s assignee, it should stand in the

shoes of the prior plaintiff and acquire the prior parties’ right to recover attorney fees

incurred in enforcing the note against Rickard. As a result of its assignee and

substituted party status, the Township claims the trial court erred in failing to hold an

evidentiary hearing on the attorney fee issue. We agree.

{¶19} The Township correctly points out that as an assignee, it “‘stands in the

shoes of the assignor * * * and succeeds to all the rights and remedies of the latter.’”

Siebert v. Columbus & Franklin Cty. Metro. Park Dist., 10th Dist. Franklin No. 00AP–

583, 2000 WL 1877585 (Dec. 28, 2000) *3, quoting Inter Ins. Exchange v. Wagstaff,

144 Ohio St. 457, 460, 59 N.E.2d 373 (1945).

5 {¶20} GSB’s complaint sought to recover from Rickard the principal amount,

interest, late charges, reimbursed escrow payments made, costs, and fees and all other

relief it was entitled to in equity or at law.

{¶21} The adjustable rate note assumed by Rickard and assigned by GSB to the

Township states under section 7. Borrower’s Failure to Pay as Required,

{¶22} “(E) Payment of Note Holder’s Costs and Expenses

{¶23} “If the Note Holder has required me to pay immediately in full as described

above, the Note Holder will have the right to be paid back by me for all of its costs and

expenses in enforcing this Note to the extent not prohibited by applicable law. Those

expenses include, for example, reasonable attorney fees.”

{¶24} The Assignment of Mortgage executed by GSB that granted the Township

its interest in the subject litigation states in pertinent part:

{¶25} “Geauga Savings Bank * * * does hereby sell, assign, transfer and set

over to Trumbull Township * * *, Assignee, all of its right, title and interest in and to a

certain mortgage * * * and Assumption of Loan Agreement * * * which encumber the real

estate * * *.”

{¶26} As the Township alleges, the trial court substituted it as the party plaintiff

in GSB’s place based on GSB’s assignment of its interests to the Township under an

assignment agreement. Civ.R. 25(C). “[A]n assignment is a transfer * * * of some right

or interest from one person to another, which causes to vest in another his or her right

of * * * interest in property. Aetna Cas. & Sur. Co. v. Hensgen (1970), 22 Ohio St.2d

83, 51 O.O.2d 106, 258 N.E.2d 237, paragraph three of the syllabus. An unqualified

assignment transfers to the assignee all the interest of the assignor in and to the thing

assigned. Pancoast v. Ruffin (1824), 1 Ohio 381, 1824 WL 23.” Leber v. Buckeye

6 Union Ins. Co., 125 Ohio App.3d 321, 332, 708 N.E.2d 726, 733 (6th Dist.1997), cause

dismissed, 84 Ohio St.3d 1423, 702 N.E.2d 433 (1998).

{¶27} Thus, as the assignee, the Township stands in GSB’s shoes and

“succeeds to all the rights and remedies of the [assignor.]” Inter Ins. Exchange of the

Chicago Motor Club v. Wagstaff, 144 Ohio St. 457, 460, 59 N.E.2d 373, 375 (1945).

Further, because the substitution operates as if the action had been commenced in the

successor's name under Civ.R. 25(C), GSB’s request for an evidentiary hearing for the

trial court to consider its request for attorney fees became the Township’s request.

Civ.R. 17(A); Boedecker v. Rogers, 140 Ohio App.3d 11, 19–20, 746 N.E.2d 625 (8th

Dist.2000).

{¶28} While we agree that the language in the assignment of mortgage and

Rickard’s assumption agreement authorizes the Township, as GSB’s assignee, to

recover attorney fees, GSB’s motion did not establish it was entitled to summary

judgment on this issue as a matter of law since its evidence, as the moving party, was

deficient to support an award of attorney fees. GSB’s motion was supported only by the

affidavit of a bank employee who avers that Rickard owes GSB $36,985 in attorney

fees. Instead of denying the requested attorney fees, the trial court should have

conducted an evidentiary hearing on the issue to apply the two-part test from Bittner v.

Tri–County Toyota, Inc., 58 Ohio St.3d 143, 145, 569 N.E.2d 464, (1991), which

governs trial court procedure when an exception to the general rule authorizes an award

of attorney fees. Lozada v. Lozada, 11th Dist. Geauga No. 2012-G-3100, 2014-Ohio-

5700, ¶54-56.

{¶29} However, in spite of GSB’s transfer of its interest to the Township and the

court’s judgment entry approving the substitution of parties, the trial court denied GSB’s

7 request because the bank was no longer a party. The Township is entitled to a hearing

to determine reasonable attorney fees, if any, in enforcing the note pursuant to Section

7(E) of the note. In light of the foregoing, the trial court’s denial of the evidentiary

hearing on the basis that GSB was no longer a party to the suit constitutes an abuse of

discretion. Accordingly, the Township’s sole assignment of error has merit.

{¶30} The trial court’s judgment is reversed and remanded.

DIANE V. GRENDELL, J.,

TIMOTHY P. CANNON, J.,

concur.