Calhoun v. Heidari
| Decision Date | 29 July 2003 |
| Docket Number | CASE NO. 02CA20. |
| Parties | E.M. CALHOUN, SUCCESSOR IN, INTEREST TO THE MILTON BANKING CO. Plaintiff-Appellant, v. BAHRAM HEIDARI, et al., Defendants-Appellees. |
| Court | Ohio Court of Appeals |
Ronald R. Calhoun, 444 Second Avenue, P.O. Box 787, Gallipolis, Ohio 45631-0787, counsel for appellants.
Steven E. Elder, Steven E. Elder, Co., L.P.A., 31 E. Locus Street, Wilmington, Ohio 45177, counsel for appellee.
DECISION AND JUDGMENT ENTRY
{¶1} This is an appeal from a Gallia County Common Pleas Court summary judgment. The court determined that ABN AMRO Mortgage Group, Inc. (ABN) had the first and best lien on real estate located at Wolf Run Road, Patriot, Ohio, and ordered the foreclosure of that lien and sale of the premises. E.M. Calhoun successor in interest to the Milton Banking Co. (Milton Bank), plaintiff below and appellant herein, and her husband, Ronald R. Calhoun, defendant below and appellant herein, assign the following errors for our review:
{¶2} On January 10, 2002, a judgment was rendered in favor of Milton Bank against Bahram and Melissa Heidari for $45,985.73 plus interest at eighteen percent (18%) per annum. A certificate of judgment was issued a month later and Milton Bank commenced the instant action on March 7, 2002. Milton Bank alleged that it had an interest in the Heidaris' Wolf Run Road real estate. They asked that all other liens against the premises be marshalled and that the property be sold at Sheriff sale with the proceeds used to satisfy their judgment lien.1
{¶3} ABN answered and admitted it had an interest in the premises. The company also filed a counterclaim and cross-claim and asserted that Bahram Heidari executed a note in the amount of $202,000 and, to secure that debt, he had given a mortgage on the premises.2 ABN alleged that the note and mortgage were in default and that the mortgage was a first and best lien on the premises. The company also asked that the mortgage be foreclosed and the property sold at Sheriff's sale with the proceeds used to satisfy its claim.
{¶4} The Calhouns got involved in the case later that year. On May 30, 2002, Melissa Heidari conveyed her interest in the Wolf Run property to Appellant Ronald R. Calhoun, who was then joined as a party defendant in the action.3 On or about June 24, 2002 Milton Bank sold its judgment lien interest against the Heidaris to Appellant E.M. Calhoun, who was then substituted into the action as plaintiff.
{¶5} Appellant Ronald R. Calhoun filed a motion for summary judgment on July 15, 2002. He argued that no genuine issues of material fact existed and that he was entitled to judgment in his favor as a matter of law. In particular, he claimed that the mortgage held by ABN did not cover the interest owned by Melissa Heidari, which was subsequently conveyed to him. Thus, he concluded, after satisfaction of the judgment lien held by his wife, he was entitled to one-half the proceeds from the judicial sale of the property before any proceeds were used to pay the ABN mortgage.
{¶6} ABN filed a memorandum in opposition and a motion for summary judgment. ABN argued that its mortgage was the first and best lien on the premises because it was recorded June 11, 2001, thus predating the 2002 judgment lien issued to Milton Bank and later acquired by Appellant E.M. Calhoun. The bank also argued that under the doctrine of equitable subrogation, Melissa Heidari's interest in the property was subject to its mortgage, despite her failure to sign the instrument, and that Appellant Ronald R. Calhoun took that interest subject to the mortgage.
{¶7} The trial court rendered a decision on December 4, 2002 in favor of ABN. The court agreed that, pursuant to principles of equitable subrogation, the ABN mortgage attached to the interests of both Bahram and Melissa Heidari, even though Melissa Heidari did not execute the mortgage. Moreover, the court found that this was the first and best lien on the premises, predating the judgment now owned by E.M. Calhoun. Because no question existed that Bahram Heidari was in default of payment on the note, ABN was thus entitled to foreclosure of its mortgage interest. The court ordered the property sold at Sheriff's sale and the proceeds used to pay taxes, then to satisfy the interest of ABN and the remainder to be held by the Clerk of Courts pending further instruction. This appeal followed.4
{¶8} We jointly consider appellants' first, second and third assignments as they raise related issues concerning whether the trial court correctly resolved the summary judgment motions. Our analysis begins with the fundamental premise that we review summary judgments de novo. See Broadnax v. Greene Credit Service (1997), 118 Ohio App.3d 881, 887, 694 N.E.2d 167; Coventry Twp. v. Ecker (1995), 101 Ohio App.3d 38, 41, 654 N.E.2d 1327; Maust v. Bank One Columbus, N.A. (1992), 83 Ohio App.3d 103, 107, 614 N.E.2d 765. That is to say we afford no deference to the trial court's decision, see Hicks v. Leffler (1997), 119 Ohio App.3d 424, 427, 695 N.E.2d 777; Dillon v. Med. Ctr. Hosp. (1993), 98 Ohio App.3d 510, 514-515, 648 N.E.2d 1375; Morehead v. Conley (1991), 75 Ohio App.3d 409, 411-412, 599 N.E.2d 786, and conduct our own review to determine if summary judgment was appropriate. Woods v. Dutta (1997), 119 Ohio App.3d 228, 233-234, 695 N.E.2d 18; Phillips v. Rayburn (1996), 113 Ohio App.3d 374, 377, 680 N.E.2d 1279; McGee v. Goodyear Atomic Corp. (1995), 103 Ohio App.3d 236, 241, 659 N.E.2d 317.5
{¶9} Summary judgment under Civ.R. 56(C) is appropriate when the movant can demonstrate that (1) there are no genuine issues of material fact, (2) it is entitled to judgment in its favor as a matter of law, and (3) reasonable minds can come to only one conclusion and that conclusion is adverse to the opposing party; said party being entitled to have the evidence construed most strongly in their favor. Zivich v. Mentor Soccer Club, Inc., 82 Ohio St.3d 367, 369-370, 1998-Ohio-389, 696 N.E.2d 201; Mootispaw v. Eckstein, 76 Ohio St.3d 383, 385, 1996-Ohio-389, 667 N.E.2d 1197; Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66, 375 N.E.2d 46.
{¶10} We further note that the party moving for summary judgment is the one who bears the initial burden of demonstrating that there exists no genuine issue of material fact and that it is entitled to judgment in its favor as a matter of law. See Vahila v. Hall (1997), 77 Ohio St.3d 421, 429, 674 N.E.2d 1164; Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, 662 N.E.2d 264; Mitseff v. Wheeler (1988), 38 Ohio St.3d 112, 115, 526 N.E.2d 798. Once that burden is met, the onus shifts to the non-moving parties to provide evidentiary materials in rebuttal. See Trout v. Parker (1991), 72 Ohio App.3d 720, 723, 595 N.E.2d 1015; Campco Distributors, Inc. v. Fries (1987), 42 Ohio App.3d 200, 201, 537 N.E.2d 661; Whiteleather v. Yosowitz (1983), 10 Ohio App.3d 272, 275, 461 N.E.2d 1331. With these principles in mind, we turn our attention to the proceedings below.
{¶11} There is no question that ABN has a first and best lien on the subject premises. The affidavit attached to ABN's motion for summary judgment states that the company recorded its mortgage on June 11, 2001. By contrast, the certificate of judgment attached to the Milton Bank's original complaint shows that the lien was filed for record on February 4, 2002 - nearly eight (8) months later. Thus, the mortgage is superior in priority to the judgment lien. See R.C. 2329.02 & R.C. 5301.23.
{¶12} The central question is whether that mortgage attached to the interests of both Heidaris, or only to Bahram Heidari's interest. Melissa Heidari was not a party to the mortgage and did not convey any interest to ABN. Thus, conventional wisdom holds that her undivided one-half interest in the property was not encumbered by the mortgage, and passed free and clear to her successor in interest, Appellant Ronald R. Calhoun. ABN asserted that under the doctrine of equitable subrogation, its mortgage extended to reach the interests of Melissa Heidari and, therefore, to appellant.
{¶13} The Ohio Supreme Court held that a third party who, with its own funds, satisfies and discharges a prior first mortgage on real estate, upon express agreement with the owner that it will be secured by a first mortgage on that real estate, is subrogated to all of the rights of the first mortgagee in that real estate. Federal Union Life Ins. Co. V. Deitsch (1934), 127 Ohio St. 505, 189 N.E. 440, at paragraph one of the syllabus. In short, if the parties so intend, a mortgagee who satisfies the first mortgage steps into the shoes of the first mortgagee.
{¶14} In support of its summary judgment motion, ABN submitted an affidavit from Elliot Liss, the owner of the Title Company where...
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